A full-time equivalent (FTE) is the standard number of hours worked by one employee on a full time basis for a period of time. It is a resource measurement that is commonly used by human resources, finance and project management.
FTE CalculationFull-time equivalent can be calculated for any period of time. For example, if a standard work week is 37.5 hours for an organization then FTE for a year is calculated as 37.5 * 52.1429 = 1955 hours.
FTE & ProjectsAn FTE can used to estimate or calculate the resources required by a project. In many cases, individuals may allocate only a small fraction of their work to a project. If there are 50 people who are 20% assigned to a project, that project is allocated 10 FTE. To put that another way, a project that requests 10 FTE for 8 weeks is requesting 37.5 x 8 X 10 = 3000 hours of work assuming a standard work week of 37.5 hours.
FTE & Human ResourcesFull time equivalent is commonly used by human resources to plan, monitor, report and implement policies. For example, a particular firm may offer part-time employees a full package of benefits if they worked 0.7 FTE or more in the previous calendar year.
|Type||Human Resource ManagementProject ManagementFinance|
|Definition||The standard number of hours worked by one employee on a full time basis for a period of time.|
|Notes||Calculations are simplified and illustrative. Regulations, professional methodologies, and accounting conventions may apply.|
|Related Concepts||Human Resource ManagementProject Management|
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