The complexity of the notion of full-time equivalent (FTE)

Every benchmark metric about staff ought to concern itself with full-time equivalents (FTE). The number appears to be plain vanilla, but reality serves tutti-fruity. It is not as simple as the normal adjustments for those who start and leave during the year. What about contract employees or temps; how do you factor in long-term consultants; and what about staff dedicated to you by other functions such as IT and HR? Do flex-time arrangements alter the calculation of full-time equivalents? Should you figure out maternity leaves and extended medical absences?

I won’t even mention open positions and funded slots. What if a person is assigned to a company-wide project; how can you integrate interns and secondees?

No, full-time equivalent can be a full-time headache (See my post of Oct. 18, 2005: FTE and internal cost ratios; May 2, 2007: common uses of full-time equivalent; June 28, 2006: full-time-equivalents of lawyers among non-lawyers; Dec. 9, 2008: “contract services law firms” instead of FTE; Dec. 31, 2008: support personnel at vendors; and Nov. 8, 2009: thousand trademarks per FTE trademark lawyer.).

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