Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer. If 0.75 FTE is considered full-time in a company, such employees may qualify to apply for the Public Service Loan Forgiveness (PSLF) program, as stated above. FTEs are the essential data needed to accurately forecast and manage labor costs across the organization. Each FTE represents the fully loaded expense of having one full-time permanent employee on staff. Three full-time employees would have an FTE of 3.0 and the part-time FTE is 0.875.
In our hypothetical scenario, our company has the equivalent of 52.40 full-time employees. Suppose a company currently has 50 full-time employees on its payroll, along with 10 part-time employees. This is how a company, on average, calculates the average yearly number of hours that a full-time employee works. Full Time Equivalent (FTE) refers to the unit of measurement equivalent to an individual – worker or student – one unit of a work or school day, applicable in a variety of contexts. In most cases, full time equivalents measure an employee or student and/or their workload. If you need to understand workload capacity, resource allocation, or project needs, use an FTE calculation.
The difference between FTE and headcount?
So, with all the previous steps in mind, let’s calculate the actual FTE based on the specific numbers we’ve used. The first step to calculating the FTE of your company is to make a list of all of your employees. FTE can serve as a parameter for your decision-making as a manager regarding promotions, dismissals, division of tasks, training and talent development. Through this, you can identify the needs and internal capabilities of your employees more easily, as well as exercise more strategic management. An employee with a regular budgeted assignment of 75% of a full-time job position has a 0.75 FTE.
- This is a straightforward example since each employee who works 40 hours per week in your company has a 1.0 FTE.
- Accurately record all hours your team worked on tasks and projects using the ClickUp Time Tracker.
- When calculating your FTEs for basic accounting or business purposes, the simplest way to do it is to divide total annual work hours for all employees by an average full-time annual work schedule.
- By calculating your FTE, you’ll be able to get information on the overall productivity of all your employees (within a team, department, or entire company).
- To identify the FTE for a specific part-time position, just divide the number of hours worked by the employee by the number of hours considered for a full-time worker.
Use FTEs to transparently communicate project progress, resource management, and workload distribution to stakeholders. Track progress and report utilized FTEs and available FTEs for specific tasks to indicate project status and identify potential delays or resource constraints. If a full-time developer works 40 hours per week, this translates to 200 FTE fte meaning weeks (8,000 hours/40 hours/week). Realistic project timelines built on accurate FTE calculations increase your project success rate and make your progress more predictable. Using Full-time Equivalents (FTE) correctly ensures that the right skills and experience are perfectly matched to your workload, boosting project efficiency and employee engagement.
Are There Other Terms Similar in Meaning to FTE?
These rates will depend on the PTO accrual rate policies of a company, organization, or institution. Considering that the FTE unit of measure is based on the total number of hours worked — it may not indicate the actual number of people working in a company. In summary, understanding the meaning of FTEs is a key competency for HR professionals today. Knowing how to accurately calculate and strategically apply FTE analysis helps optimize staffing, forecast budgets, align talent strategy to business goals, and support employee retention.
Let’s say you have 100 employees, but 18 of those employees are part-time and only work 10 hours a week. Altogether, those 18 employees only account for https://www.bookstime.com/ the hours of 4.5 full-time employees. The Fair Labor Standards Act (FLSA) doesn’t define what full-time or part-time employment is for any employer.
Add annual hours worked for full-time employees and part-time employees
Additionally, you can use FTE to determine pay for part-time workers by simply multiplying a part-time employee’s FTE by the full-time salary for that same position. For example, if a full-time program coordinator makes $60,000 per year for 40 hours a week, a part-time employee working 25 hours per week in the same position (0.625 FTE) would make $37,500 per year. They also use it to calculate labor costs for the expected project workload and subsequently define the funds needed to finish a project. FTE goes even further than solely calculating project or staffing needs.
Do you want help with the management of your company’s key figures, helping your team make the right decisions, and implementing the right measures in personnel planning? The 109,000 total hours worked must be divided by the total number of available work hours in a year, or 2,080 hours. Using the same formula, the number of part-time hours worked amounts to 5,000 hours per year.
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