I was talking to a friend in the research/analysis business the other day and she lamented that there didn’t seem to be a firm understanding of the definitions of FTE (Full Time Equivalent) or Head Count in the HR world. Specifically, she shared that when research firms like hers send out surveys to HR professionals there frequently are demographic questions that include asking how many FTEs are in the HR function in their organization. My friend has been frustrated by the frequency of responses that show the confusion between the definitions of FTE and Head Count and how that impacts the ability make accurate conclusions from the rest of the survey responses.
Here’s the thing: I know that HR professionals know the difference between FTE and Head Count. But somehow, when surveys need filling out, confusion reigns.
I’ve spoken to a number of HR folks over the last couple of weeks and asked what the head count in their HR department was. They quickly came up with a number and the answer usually started with “…around…” Then I asked what their budgeted FTEs were. Regardless of the size of the organization, the answer started with, “well, I’m not sure. I’d have to look that up.”
HR people know head count, that’s for sure – or can come pretty darned close. But they first ask if you want them to include temps, interns and other “off the budget” people. They literally count heads. Which, of course, is correct. Thus the term, Head Count.
If you ask for FTEs, they are frequently not sure. FTE seems to require preciseness; head count, not so much. Maybe it has to do with the budget. Budget-related = official: “I’ll look it up.” Not budget-related = unofficial: “I can get close.”
Here’s how SHRM defines FTE: FTE is an abbreviation for full-time equivalent, which represents the total labor hours invested. To convert part-time staff into FTEs, divide the total number of hours worked by part-time employees during the work year by the total number of hours in the work year (e.g., if the average work week is 37.5 hours, the total number of hours in a work year would be 37.5 hours per week x 52 weeks = 1,950 hours). Converting the number of employees to FTEs provides a more accurate understanding of the level of effort being applied in an organization. For example, if two employees are job sharing, they constitute one FTE.
So there is a difference; and sometimes it’s a big difference.
The next time you receive a survey from SHRM, a research organization, or your C-suite, and it asks for FTE information, don’t confuse Head Count for FTE – and go ahead and look it up!