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.
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