What is Full-Time Equivalent (FTE)?

Full-Time Equivalent (FTE) is a unit of measurement that represents the workload of an employed person in a way that makes workloads comparable across various contexts. It is used to standardize the number of hours worked by full-time and part-time employees, making it easier to compare and manage staffing levels.

How to Calculate Full-Time Equivalent (FTE)

1. Determine the Total Workload:

• Calculate the total number of calls or tasks handled in a specific period (e.g., a month).

• Determine the average handling time (AHT) per call or task in minutes.

2. Calculate Total Work Time Required:

• Multiply the total number of calls or tasks by the AHT to get the total work time required in minutes.

• Convert this total work time into hours by dividing by 60.

3. Calculate Available Work Hours:

• Determine the number of working hours per day and the number of working days in the period.

• Multiply the daily working hours by the number of working days to get the total available work hours per employee.

4. Calculate FTE:

• Divide the total work time required by the total available work hours per employee to get the FTE.

Example Calculation

• Let's say your contact center handles 10,000 calls per month, with an average handling time of 5 minutes per call. Employees work 8 hours a day, 22 days a month.

1. Total Workload:

• Total calls: 10,000
• AHT: 5 minutes

2. Total Work Time Required:

• Total work time = 10,000 calls * 5 minutes = 50,000 minutes
• Total work time in hours = 50,000 / 60 = 833.33 hours

3. Available Work Hours:

• Daily working hours: 8
• Working days per month: 22
• Total available work hours per employee = 8 * 22 = 176 hours

4. FTE Calculation:

• FTE = Total work time required / Total available work hours per employee
• FTE = 833.33 / 176 ≈ 4.74
• So, you would need approximately 4.74 full-time employees to handle the workload in your contact center.

Why Full-Time Equivalent (FTE) Matters

FTE is important for several reasons:

• Resource Planning: Helps in planning and allocating resources effectively.
• Budgeting: Assists in financial planning and budgeting by standardizing labor costs.
• Compliance: Ensures compliance with labor laws and regulations, such as the Affordable Care Act (ACA) in the United States.

Factors Influencing Full-Time Equivalent (FTE)

Several factors can influence FTE, including:

• Work Schedule: The number of hours an employee is scheduled to work.
• Company Policies: The defined full-time hours set by the employer.
• Part-Time vs. Full-Time: The mix of part-time and full-time employees in the organization.

Strategies to Improve Full-Time Equivalent (FTE)

To improve the management of FTE, consider the following strategies:

• Optimize Scheduling: Ensure efficient scheduling to maximize productivity.
• Monitor and Adjust: Regularly review and adjust work schedules based on business needs.
• Training and Development: Invest in training to enhance employee skills and productivity.

Related Terms

• Part-Time Equivalent (PTE): A similar measure for part-time employees.
• Workforce Management: The process of optimizing the use of resources to meet service level goals.
• Labor Cost: The total cost of employing staff, including wages, benefits, and taxes.

Conclusion

Full-Time Equivalent (FTE) is a valuable metric for standardizing and managing employee workloads. By understanding and effectively utilizing FTE, organizations can improve resource planning, budgeting, and compliance with labor regulations.