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What is Full-time Equivalent?

FTE stand for full-time equivalent that measures how many full-time employees would be required to perform the work. The ratio of the total number of paid hours during a period (part time, full time, contractual).  FTE (full time equivalent) is the number of working hours that represents one full-time employee during a fixed time period, such as one month or one year. FTE simplifies work measurement by converting work load hours into the number of people required to complete that work.

FTE is a combination of employees, each of whom individually is not a full-time employee as they are not employed on average at least 30 hours per week, but one who completes full time being a part time employee are counted as the equivalent of a full-time employee. Take for instance, there are two employees, each of whom works 15 hours per week, are the equivalent of one full-time employee.

FTE is calculated with the help of following formula:

Total FTEDs = (total average hours of full-time agents + total average hours of part-time agents)/40

Helpdesk outsourcing companies determines how many hours one full time employee works. Total number of scheduled hours subtracting holidays and PTO (personal time off) from it. Also add additional time or overtime done by the employee; be it paid overtime or unpaid. This helps in calculating the annual working hours for each job position.

FTE is a methodical analysis that help management to understand drivers leading to workload levels, organizational performance, and productivity improvement opportunities. This method helps in reducing and optimizing overhead expenses thereby meeting customer expectations and increasing customer retention. 

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