Definition: Full-Time Equivalence, or FTE, is a unit of measurement used to represent the total productive hours of an ideal full-time resource. This varies depending on organizational policies, industry practices, or specific requirements. One or more full-time or part-time resources may need to contribute productive time to make up an FTE. For Example, if an employee works 30 hours per week and the standard workweek is 40 hours, the FTE would be 0.75 (30/40). The remaining 0.25 would need to come from another employee.
Calculation: (Total Productive Time)/(FTE Hours Target)
Importance: FTE is commonly used in workforce planning, budgeting, and resource allocation to calculate the number of full-time employees required to meet operational needs and maintain appropriate staffing levels.
Alternate Terms: Full-Time Equivalent, Full-Time Employee.