What does fte mean for finances

Calculate FTE or compare apples with oranges

This comparison lags, do you think? Not at all, because as a HR manager you have to do just that - get part-time employees and full-time employees under one roof. So the apples and the pears. But how does the conversion from part-time employees to full-time employees work? With the help of FTE, the full time equivalent; in German: full-time equivalent (FZÄ).

Have your FTEs displayed in Personio with one click.

Germany is on the way to becoming a part-time republic. Because the old eight-hour norm is no longer normal. On the contrary. More and more people are working part-time, to be precise: four out of ten. In hard facts: 9.1 million workers are employed part-time. For you as a HR manager, this means that you have to convert part-time employees into full-time employees. Only if you calculate FTE can you calculate meaningful personnel figures from the different working time models in your company. The basis for strategic decisions.

What does RTD mean?

The term FTE (Full Time Equivalent) is a mathematical variable for measuring working time. FTE does not refer to the number of real employees or jobs in a company, but only expresses the time value that a full-time worker produces. HR departments use the FTE as a benchmark in order to add up the total working time in the company - regardless of (part) time models - to fictitious full-time positions.

Note: One FTE corresponds to the working hours of an employee full-time. The FTEs result in the number of fictitious full-time positions with the same working capacity for a number of actually existing positions with different working time models. To convert an FTE into working time, the average working time per working day is taken as the standard.

Have FTEs calculated automatically

The FTE report from Personio offers numerous filter options when calculating the FTE, such as B. Period and departments. Calculating FTEs is child's play!

Why should you calculate full-time equivalents?

You calculate Full Time Equivalents in order to be able to convert the hours worked by part-time employees into the working capacity of fictitious full-time employees. If your company has a large number of part-time employees, it is necessary and useful to convert their hours into FTEs. In this way, you create the basis for further analyzes, such as determining the personnel requirements in the event of restructuring or planned capacity expansion or reduction.

How do you calculate FTE?

You don't have to be a math genius to calculate FTEs. The annual basis for an FTE is 2080 working hours. The number 2080 results from the following assumptions.

A full-time employee works:

  • 8 hours a day
  • x 5 days per week (8 * 5 = 40 hours)
  • x 52 weeks per year (40 * 52 = 2080 hours)

These 2080 hours as the basis for the FTE calculation are of course not set in stone, as vacation days, public holidays, illnesses or the like are missing in this calculation model. As a basis, however, you can use this number safely and reliably.

In four steps to the FTE / FTE calculation

The basic assumption for the calculation is the basis of 2080 working hours for an FTE.

Step 1:

In order to be able to convert the work performance of a part-time employee into that of a full-time employee, first determine the number of hours that are worked by part-time employees.

Example:

  • 3 part-time employees worked 15 hours per week over a period of 30 weeks. 3 * 15 * 30 = 1350 hours
  • 2 part-time employees worked 20 hours per week over a period of 40 weeks. 2 * 20 * 40 = 1600 hours
    Part-time hours: 2950 hours

Step 2:

Determine the number of hours worked by full-time employees.

Example:

  • 6 full-time employees worked 40 hours over a period of 52 weeks. 6 * 40 * 52 = 12480 hours
    Full-time hours: 12480 hours

Step 3:

Add up the part-time hours and the full-time hours. You will receive the total number of hours.

Total hours: 15430 hours

Step 4:

To the annual FTE To determine your business, divide the total hours by the number of full-time hours in an FTE.

In our example: 15,430: 2080 = 7.418 FTE annually

Sample examples for FTE calculation:

A) There are 168 working hours in the month of May. The employees of the company Mustermax worked 7056 hours in this period.
This results in 42 FTE (7056/168 = 42).

B) Tuesday has 8 working hours. The COOLIT programmers worked 136 hours that day. It surrender 17 FTE (136/8 = 17).

Summary: how to calculate FTE / full-time equivalent

  1. Find the total number of hours worked by part-time workers.
  2. Find the total number of hours spent by full-time employees.
  3. Add the two values ​​together.
  4. Divide the calculated total by the number of hours a full-time equivalent works.

The underlying period can be, for example, a day, a month or even a year.

What are RTDs not?

FTE or FTE are no real employees or "heads" as they result from the typical headcount. So no full time Employees, but the arithmetical equivalent, the current value of the work performed by a full-time worker.

Note: So you convert your part-time employees into the work of a full-time employee.

This means that the value of an FTE is constant over time until you adjust the current working hours in the company and thus change the calculation basis.

This is how working time recording works with Personio

Time recording is an issue for all employees - not just HR. Because with modern time recording tools like Personio, everyone is involved in time recording, which saves time and money.

FTE offers you these 5 advantages in concrete terms

  1. The FTEs are the Basis of your Strategic personnel planning - with the FTE calculation you can determine which work output is actually available to your company. The number of employees does not matter here.
  2. Based on the full-time equivalent, you can use the Compare employee capacities of different companies or parts of companieswho employ employees with differently structured full-time and part-time models.
  3. FTEs are among the main Personnel figures at all. They help you in the HR area, better assess, assess and control future developments in the company. In particular due to the strong increase in part-time employees on the labor market, your personnel planning becomes more transparent with the calculation of FTEs.
  4. FTEs help with Performance calculation of your company. Because FTEs can be used to determine and evaluate the normalization of tasks and their division into time units. Using FTEs, you can quickly and easily determine how many tasks an employee can complete in a certain period of time - regardless of whether they are part-time or full-time. Especially with the Project planning this is of great help. FTE makes it easier to calculate sales, productivity and profit per employee.
  5. For you as an HR manager, well-founded analyzes and the resulting knowledge of your full-time equivalents are extremely relevant because the FTE count is checked by the federal and state governments, which labor laws apply to your company and which not, for example when exempting works council members.