Updated: Dec 31, 2021
Full time equivalent = unit of time measurement for an individual worker in a day
Lets understand this with an example:
As defined by labor law of that country, an individual gets employed for a day for certain unit of time. Here is Ms. Nina working for ABC Company in India - Lets look at her timeline:
Nina is scheduled to work for 9 hours every day for 5 days in a week.
Nina is defined 1 FTE employed for work.
Thus, similar to Nina every employee is counted as 1 FTE if they render a total of 9 hours a day for work
Another instance, Mr. Roy and Mr. Khan joins ABC company in India as a part-time employees since they are students. They are scheduled to work for 4.5 hours a day for 5 days a week.
In this case, since Mr. Roy gives 4.5 hours a day to work which equates to 50% of 9 hours and Mr. Khan too gives just 4.5 hours a day to work. Both together are counted as 1 FTE.
Mr. Roy = 4.5 hours = 0.5 FTE
Mr. Khan = 4.5 hours = 0.5 FTE
Mr. Roy + Mr. Khan = 1 FTE
Lets elaborate the understanding with some simple FTE calculations:
ABC company have hired 465 employees for Customer Care contact support.
Out of this, 304 employees work for 9 hours and rest are part time employees who work for 4.5 hours. Please calculate total FTEs in ABC Company?
Total Employee - 465
Full Time Employees = 304 = FTEs
Part Time Employees = 465-304 = 161 = 161 X 0.5 = 80.5 FTEs
Total FTEs = 304 + 80.5 = 384.5 FTEs
Thus, ABC Company has a total 384.5 FTEs as of today
Number of employees in a company are not always equal to FTEs.
Try it Yourself
What do you understand by FTE definition?
Share your answers in the comments section.