What is FTE in Project Management?

FTE (full-time equivalent) is the unit of measurement that measures the ratio that represents the hours worked by an individual employee within a week, generally from Monday to Friday. After completing the project, you can remove them without any negative effects of the termination of an employee. FTE calculations make project planning easier and more accurate because project managers know the actual capacity their team has, and the capacity required for a particular project. 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. You can take the average number of hours spent by part-time employees per week and not make separate calculations every week. Still, in this case, it’s more reasonable to take some bigger periods, let’s say, 90-day or 120-day periods, during which you can take the average number of hours spent by part-time employees.

However, it was included in the report because my customer also wanted to compare capacity vs. demand and wanted to discover the remaining availability. Let’s say that you have a frontend developer named Mark who is one of your part-time employees. To convert the number of hours an employee will be working based on their FTE, you need to reverse the process of calculating the FTE based on the number of hours worked by that employee. Things can get tricky if you have offices in countries that define and regulate full-time employees differently.

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Once you have your total FTE count, multiply it by $83,200 to find your total spent on full-time equivalent workers. Calculating FTE even gives small businesses insight into whether they’re paying too little or too much in project costs. Our team at Floatemploys a global remote workforce, with most working from home (or from a co-working space).

If your employees put in 40 hours a week, it means they are employed full-time. 2,080 hours are worked by a full-time employee who works 52 weeks a year. The annual working hours of your workforce can be added up and divided by 2,080 to determine FTE. Headcount planning is a hugely strategic exercise that seeks to address the goals, objectives, and developments a business undergoes.

How to Calculate Work Hours?

A 100% FTE is generally compared to part-time or reduced-hours employees, who are regarded less than 100% FTE. Increased brand awareness means that consumers are more familiar with and identify a brand. FTE (full-time equivalent) is a measure of how many full-time employees a company has or how many part-time employees work the same amount of hours as a full-time employee. When your company’s profitability rises, it means it’s making more income.

• Increased employee morale typically translates into increased productivity and performance, allowing a larger number of employees to complete the same amount of work with fewer FTEs.
• You may have a lot of employees, but they may not spend much time working for you.
• More people can contribute their unique thoughts and perspectives to assist solve problems and make key decisions when you have a larger team.
• Resource Management View team workloads and reallocate tasks to avoid burnout.
• The calculator will tell how many full-time employees that represents and whether or not you are an Applicable Large Employer.
• You can calculate the FTEs required for the project by estimating how many hours each task will take and then adding them all up.

She can often be found testing and writing about apps meant to enhance the workflow of freelancers, remote workers, and regular employees. Appeared in G2 Crowd Learning Hub, The Good Men Project, and Pick the Brain, among other places. To help you determine if you are eligible for a small-employer healthcare tax credit, you need to count the number of employees employed in your company throughout the year. As stated in the Eligibility for the Small Business Tax Credit Program section above, small businesses are eligible for such a tax credit if they employ less than 50 full-time equivalent employees .

Using FTE and Resource-Based Capacity

That means that before calculating a company’s FTE, a manager shall consider, first of all, company and country distinctions and regulations. And this also means that 1 FTE may equal a different number of working hours in different countries or even companies. CTO at Orbiter, Adviser at LOT.TRADE & Founder Wobbly.me and co-founder of Lazy Ants. I am advising on the production and growth of blockchain-based projects. I do web and smart-contract development, IDO, DAO and DeFi, CEX and DEX listings.

Moreover, having accurate FTEs for all employees will also help employers determine responsibilities towards them, their PTO rates, and whether the business is eligible for certain federal programs. Once you decide why you want to use FTE, identify the appropriate calculation method, and follow it through. However, if your company employs part-time employees as well, several of them together may equal 1.0 FTE. To calculate the number of hours your employee is expected to work based on their FTE, you’ll need to reverse the previously mentioned process of calculating FTE based on the number of hours worked.

Headcount vs FTE

Rated #1 on G2 for fte meaning management, more than 4,000 of the world’s top teams choose Float to plan projects, manage resources, and track their team’s time. As a rule of thumb, the equivalent number of part-time workers is derived by dividing the total number of working hours by the number of hours worked by a full-time employee. So we can say that FTE is good for morale and your employees will work even better with FTE. This financial term assesses the productivity of all employees, full-time or part-time, regardless of their employment status. Employers and businesses use this measurement to track employee workloads and make recruitment and budgeting plans for the future. While resource needs may be realistically fulfilled by FTE, project management issues can disrupt the effort.