Understanding the Efficiency of Your FTEs and How to Close Your Skills Gap

  • 5/4/2020
  • Read Time : 2 min
FTE

Your company’s FTE, or Full-Time Equivalent, is a way of calculating the number of hours worked by a full-time employee. This metric is also used to determine what the full-time equivalent would be of your part-time staff. Assuming that every employee works 8 hours a day, 5 days a week, for 52 weeks a year, the total comes to 2,080 hours a year, which is considered to be the industry standard for annual FTE.

However, this does not take into account deductions for holidays, vacations, sick time, bathroom breaks, lunch, etc. Some alternative FTEs attempt to incorporate these factors and have been calculated to be as low as 1,680 hours. Similarly, the standard number of vacation days can range from country to country, so different regions calculate their FTEs differently.

Project resourcing using FTEs

Let’s assume you have a large manufacturing production coming up. FTEs are an easy way to calculate a measure of both staff count and project hours. This makes it easier to calculate how many workers you’ll need for a particular project. Let’s say you have a production run coming up that will take a week. It may include 300 hours of work which can be equated to 7.5 resources working on it full-time and 1 person working part-time. If the project scales up, then so will your quantifier, the FTE. You’ll then know the project will require 8.5 FTEs.

FTE = total average of part-time hours worked per week/30 + number of full-time employees. So, for example, if your company operates for all the working hours in January (168 working hours), and your manufacturing plant workers are on shift for 6,580 hours a month, then you will have an FTE of 39.

Step 1: How many part-time workers do you have? (The IRS counts part-time workers as those who work less than 130 hours a month, or 30 hours a week.)
Step 2: Calculate the average amount of hours each part-time worker does per week, then add them all together.
Step 3: Take the result and divide by 30.
Step 4: Round down to the nearest whole number.
Step 5: Add that number to your full-time employee count.

Predicting workload in manufacturing

A variable within manufacturing that makes production schedules harder to forecast involves onboarding. When you employ a worker, you assume a certain level of efficiency, speed, and competency when calculating how much manpower is needed for a particular project. However, with the industry facing a looming skills gap, increasingly complicated technologies, and the need to balance training schedules, it can be very hard to predict precisely how fast you will be able to onboard a new contractor.

Projects going on for longer than anticipated can lead to longer cycle times, missed deadlines, and costly mistakes. That is why technologies like augmented reality for training and remote assistance can ensure that your FTEs accurately reflect the productivity of your plant. When you can predict the productivity of your plant, you can plan accordingly, reducing waste.

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Tags:
  • Augmented Reality
  • Aerospace and Defense
  • Automotive
  • Electronics and High-Tech
  • Industrial Equipment
  • Oil and Gas
  • Digital Twin

About the Author

Prema Srinivasan, Digital Content Marketing Manager

As a Digital Content Marketing Manager, I bring the latest technology stories to the forefront. I'm passionate about engaging readers and empowering decision makers with relevant, up-to-date content.