It is a unit of measure used to calculate an individual's workload or employment status in relation to a full-time position. It is commonly used in human resources and workforce management to determine the number of hours worked by part-time employees or contractors relative to a standard full-time workweek. FTE is calculated by dividing the total number of hours worked by an employee or group of employees by the number of hours considered full-time for that particular Organization or industry. The result is expressed as a decimal or fraction, representing the equivalent number of full-time employees. For example, if a company has two part-time employees who each work 20 hours per week, and the standard full-time Workweek for that company is 40 hours, the FTE calculation would be as follows: Total hours worked by both part-time employees: 20 + 20 = 40 FTE = Total hours worked / Full-time hours FTE = 40 / 40 = 1 In this case, the two part-time employees would be considered as one full-time equivalent employee. FTE calculations are useful for various purposes, such as determining staffing needs, budgeting, and analyzing workforce productivity. It allows organizations to compare and aggregate the work performed by individuals with different employment statuses, providing a standardized workforce planning and management measure.
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