If you want to save time, why not use our free full time equivalent calculator template for excel to easily work out your company’s FTE. CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.

What does FTE mean?

This helps HR focus their recruitment efforts and inform workforce planning efforts to ensure they have the right people in the right place to meet organizational goals. Whether you hire employees as part time or full time depends on your business needs and local regulations. A part-time workforce might save you money in wages and benefits but could, in turn, cost more in rehiring and training. To calculate the total FTE, add the number of FTEs worked by full-time employees (1 full time equivalent FTE for each full-time worker) to the part-time FTE you calculated in step five.

The importance of FTE in workforce planning

We’ll assume that where you are, full-time employment means working 8 hours a day, 5 days a week, for 52 weeks a year. Benefits like paid time off and maternity/paternity leave are all included within the number of hours worked, so don’t worry about accounting for these hours. By aligning development initiatives with FTE insights, organizations can ensure that their workforce remains agile, skilled, and fully equipped to meet the challenges and opportunities of the future. Understanding how to calculate FTE is crucial for employers, as it provides a unified way to understand the work hours within their organization, helping in everything from budgeting to compliance.

To maximize the benefits of Full-Time Equivalent (FTE) and mitigate its challenges, organizations should implement best practices in FTE management. Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees. If you’re ever asked to calculate FTEs for your company, the person or organization asking you for the figure should be able to outline exactly how they expect you to arrive at your result. Generally speaking, you can arrive at your own FTE by following the steps below.

How to calculate headcount

As an experienced HR professional and content writer, She has contributed to leading publications in the field of HR. Plan the right people at the right times and save valuable time and money in your store. In this case, the employee’s FTE is 0.75, which means they work 0.75 of a full-time equivalent.

This value will be more helpful for project managers or project leads for workforce management and work distribution. By utilizing this computation, organizations can accurately measure their workforce capability, fostering strategic judgment and guaranteeing optimal utilization of human assets. Fix the weekly durations for a full-time work role, usually varying from 30 to 40 hours weekly for the majority of employers. This standard assists in distinguishing between full-time and part-time staff members based on their weekly labor hours. FTE tracking eliminates the need for separate calculations of working hours and staff count, streamlining project management processes. FTE is especially well-suited for structural and manufacturing businesses characterized by prolonged durations and extensive hiring of employees.

• You can apply different methods for different classifications of employees, as long as you apply the method consistently within each classification.
• When tasks are allocated according to FTE, supervisors can ensure each team member’s workload corresponds with their capacity, averting both excess and insufficient work.
• FTE metrics provide a quantifiable measure of the workforce’s composition, offering insights into the balance between part-time and full-time employees.
• Full-Time Equivalent (FTE) is a powerful metric that simplifies workforce management in various aspects of business.
• When used in HR, a Full Time Equivalent refers to the total number of working hours contributed by an employee or a group of employees on a full-time basis.

Now, find the total by adding the worked hours of all three part-time employees in a week. If, for instance, an enterprise adheres to a 40-hour working week, equal to 1 FTE, it signifies that full-time workers are envisaged to engage in 8 hours of work daily throughout a five-day operational cycle. This standardization of working hours serves as a pivotal benchmark for FTE assessments, delivering a uniform framework to assess the workload and parity among workers. It is sometimes useful to know how the total number of full-time and part-time employees are working in a business. But, in many situations, a business needs to view or report its staffing level in terms of full-time work.

Get this by multiplying the number of full-time employees by the number of hours in a working week (usually 40, though sometimes less). This is where the concept of the full-time equivalent (FTE) employee comes in. This is done by counting somebody who works half as much as a full-time employee as half an employee, and so on. It might sound cold, but it’s a vital metric when companies are applying for government loans, and when determining whether the company is large enough to have to follow certain laws. So if an employer has 10 full-time employees and 70 part-time employees, they would be required to offer coverage to the 10 full-time employees if their total workforce under the FTE calculation amounts to at least 50. Human resource management is the backbone of any successful organization.

If your business considers 40 hours to be a full-time workweek, then an employee working 40 hours per week would have an FTE of 1.0. In contrast, a part-time employee working only 20 hours per week would have an FTE of 0.5—which shows that their hours worked are equivalent to half of a full-time employee. Completing a project is not only doing the project within a calculated budget and timeline. If a project manager has several projects at the same time plus several projects planned for the future, it becomes impossible to plan resources accurately without calculating FTEs. Ultimately, it is pivotal for a corporation to verify FTEs as it offers a clearer insight into the effectiveness and worth of its part-time workforce, measured by the number of tasks accomplished.