FTE (Full-Time Equivalent)

Your agency has 20 people on the payroll. Sounds like a 20-person team, right? Except four work part-time (3 days/week), two are contractors at 50%, and one senior strategist does 4 days/week. Your actual workforce isn't 20 — it's closer to 16.6 FTE.

FTE (Full-Time Equivalent) is the standard way to normalize different working arrangements into a single number. One person working 40 hours per week = 1.0 FTE. Someone working 24 hours per week = 0.6 FTE. Two half-time contractors together = 1.0 FTE. The math is straightforward: actual hours ÷ standard full-time hours = FTE.

Why FTE Matters for Agencies

Headcount alone is misleading. Saying "we have 5 designers" tells you nothing about actual capacity if two of them work three days a week. In FTE terms, you might only have 3.6 FTE of design capacity — a meaningful difference when you're deciding whether to take on a new project or calculating your break-even point.

FTE shows up in three critical places:

Capacity planning. When forecasting whether you can handle next quarter's pipeline, FTE gives you the real number. 10 people at an average of 0.85 FTE = 8.5 FTE of actual bandwidth. Plan to 10.0 and you'll be overallocated before the quarter starts.

Headcount planning. "We need to hire 2 more developers" sounds clear, but do you need 2.0 FTE or would 1.5 FTE (one full-time hire plus a part-time contractor) cover the gap? FTE makes the conversation precise.

Financial modeling. Cost calculations, overhead allocation, and revenue forecasts all benefit from FTE normalization. Comparing cost-per-FTE across teams reveals efficiency differences that raw headcount hides.

FTE and Man-Days

These two units complement each other. A man-day measures work output (one person, one day). FTE measures workforce size. A 1.0 FTE employee produces roughly 20 man-days per month; a 0.5 FTE contractor produces about 10. When you're estimating a project at 60 man-days, knowing your team's FTE tells you how many calendar weeks that actually takes.

Keeping FTE Accurate

The challenge is that FTE isn't static. Contractors ramp up and down. Employees go on parental leave (dropping from 1.0 to 0.0 for months, then maybe returning at 0.8). Someone negotiates a four-day week. If your resource pool doesn't reflect these changes, your capacity math is wrong.

In WrkSched, each team member's weekly capacity setting effectively defines their FTE. Set someone to 24 hours/week in a 40-hour standard, and the system knows they're 0.6 FTE. The utilization reports and capacity dashboards use this real number — not an assumed 1.0 — so your forecasting stays grounded in reality.