What is an FTE?
Full time equivalents (FTEs) are a standardized unit of measurement in resource management representing the full-time capacity of a single worker.
FTE:
Definition | Example | Synonyms
An FTE represents the working time that a full-time employee invests during a specific period. This period can vary but is often based on a week (usually 40 hours) or a month.
FTEs are not a fixed measure. Although a typical full-time week in the US is 40 hours, this can vary from company to company, country to country and even week to week (e.g., due to statutory holidays).
A Practical Example
Ben works full-time at TechDesign in New Orleans. As a full-time employee, he works 8 hours per day and 40 hours per week. Therefore, 1 FTE at TechDesign equals 40 hours per week.
Ben’s colleague, John, is on a part-time contract and works 20 hours per week. This means they have 1.5 FTEs available in total.
However, a full-time position at TechDesign’s UK office in London is only 35 hours per week. This means that 1 FTE at TechDesign UK equals 35 hours per week. FTEs also vary based on different holidays and their temporary impact on weekly working hours.
- At TechDesign New Orleans, an FTE during the week of Mardi Gras corresponds to only 32 hours; they take Carnival seriously!
- At the New York branch, however, it remains at 40 hours during the same week.
Synonyms and Abbreviations
“FTE” is already an abbreviation for “full-time equivalent”.
FAQ
FTEs are primarily used to standardize the representation of the capacity of employees of all employment types and departments, thus providing a uniform overview of the company’s staffing needs. Companies with many part-time employees stand to benefit the most from converting to FTE.
An FTE is made up of hours of a single employee with a full-time contract. For the majority of American companies, this is 40 hours a week.
By using FTEs your company can:
- Transparently and uniformly represent the full available workforce.
- Analyze capacity easily and compare different departments or parts of the company.
- Fill missing capacities through targeted recruiting efforts.
- Get a better idea of the effort needed for projects and tasks and determine who is right for them.
While an FTE indicates the amount of work to be performed within a certain period, the term “person-days” describes the working time in hours that a person can work in a workday. This is 8 hours in the US.
Calculating FTE is as simple as dividing resource capacity (in hours) by the working hours in a standard calendar.
The following formula can help:
Here’s a brief example:
Ms. Smith works full-time in her company. So, the standard calendar’s working hours are 40 hours. However, this week, Ms. Smith took one day off. Therefore, she only works for 32 hours. Accordingly, her resource capacity for this week is 0.6 FTE.
Calculation of an annual FTE:
The annual basis for an FTE is 40 hours per week multiplied by 52 weeks, which equals 2080 hours. To calculate the total available FTEs in your company, including both full-time and part-time employees, follow these 4 steps:
Step 1:
First, you need to determine the resource capacity in hours for part-time employees. Let’s assume there are 5 part-time employees working 20 hours per week for a period of 30 weeks. Additionally, 2 part-time employees work 15 hours per week for 35 weeks.
Calculation:
5 × 20 × 30 = 3,000 hours
2 × 15 × 35 = 1,050 hours
So, the total number of hours worked by part-time employees is 4,050 part-time hours when added together.
Step 2:
Now, let’s calculate the number of working hours for full-time employees. Let’s assume there are 8 full-time employees working 40 hours per week for 52 weeks in a year.
Calculation:
8 × 40 × 52 = 16,640 full-time hours
Step 3:
To calculate the total number of working hours, simply add the part-time and full-time hours together.
Calculation:
4,050 part-time hours + 16,640 full-time hours = 20,690 total hours
Step 4:
To calculate the annual FTE of your company, simply apply the formula above. That is: divide the total hours by the annual FTE.
Calculation:
20,690 ÷ 2,080 = 9.95 FTE
So, the company has 9.95 FTE available.
FTE in Meisterplan
Meisterplan also measures resources in terms of working time as hours, person-days or full-time equivalents (FTEs) to make resource planning and management as convenient as possible for you. With the visualization of resource capacities through FTEs, Meisterplan provides you with a better overview of your staffing needs, allowing you to see exactly when and where resource constraints exist.
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