FTE data can be used to convert hours worked by part-time employees into hours worked by full-time employees. This is handy for businesses in relation to calculating projected costs and resources required, as it standardizes the measurements. The ability to report on FTE is important when a headcount cannot be used as a headcount purely refers to the total number of employees, including both part-time and full-time employees. The full-time equivalent (FTE) definition refers to the number of hours considered full-time – regardless of headcount. This in turn can then be used to more accurately calculate employee productivity and other metrics.
An example of the above is an employee who works 20 hours a week in a 40 hour a week business. In this scenario, the employee is 0.5 FTE.
How to calculate FTE
The calculation of full-time equivalent (FTE) is an employee's scheduled hours divided by the business hours for a full-time work week. E.g. If you have a 40-hour work week, employees who are scheduled to work 40 hours per week are 1.0 FTE. If an employee works 10 hours per week, they are 0.25 FTE, and four 0.25 employees would be 1.0 FTE.
Within the payroll system, you can use the Detailed activity report and follow the below instructions:
- Run the Detailed activity report using the required filters and export it to excel:
- Within the Excel export, the total hours are in column F. In this example, the report was run for a monthly period:
- In order to determine the FTE data, you need to divide the number of hours worked by a part-time employee by the number of hours worked by a full-time employee for the same period. In the above example, 'Sonia Dada' is the full-time employee who has worked 164.66667 hours for the month. The other 2 employees are part-time so the calculations are:
- For Adam Stone - 108.33333 hours / 164.66667 hours = 0.65 FTE
- For Frieda Bone - 86.66667 hours / 164.6667 hours = 0.52 FTE
Another way to determine the FTE is based on how many days a week a person works. If an employee works 3 full days per week, the FTE is 3 working days / 5 weekdays= 0.6 FTE.
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