Understanding how much you or your employees work annually is crucial to being able to manage your finances. All of us have some basic idea of how much we work per week, and we know that even though those hours can change from time to time, we have a general knowledge of what is happening with our salaries. However, when it comes to running a business or preparing taxes, we don’t need just a general idea, we need exact numbers. In this 2023 guide, we are going to help you learn how to calculate FTE work hours in a year. This information is beneficial for not only employees but also those who run businesses.
Why do you need to have this information?
We all know that 40 hours are the standard for full-time members of the staff, but if you are running a brand where not all of your employees have the same number of hours per week, and some of them may be irregular schedule employees, we need to have the exact information.
This type of concept is most commonly used to help get a better idea of your revenues, profits, and even headcounts and square footage. Many employers who want to better dedicate their funds wonder if they could be able to hire more personnel, and on the same note, they are wondering if they could afford to move an irregular schedule member of the staff to whole-time.
The full-time equivalent will help you get a better idea of not only how many workers your company has, but it can also give you information on how many people are required to successfully lead and finish a project while staying within your budget.
On the same note, when you have this data, you will be able to estimate the costs that go into labor, see where there is room for improvement, and which employees can get additional bonuses or raises. Once again, these numbers will help you find financial solutions for your company without risking losing profits or breaching your budget.
When it comes to employees, they can also benefit from getting these numbers, since they will learn how much their average paycheck is and how it can differ during the years depending on how many hours they labor annually. FTE will give you a better idea of how much you are making, and if you are being over or under-paid compared to the average for your current position. Know that when you have these digits on your side, you will be able to ask for a raise or look for a different job in a competitor’s company.
How do you determine it?
The annual full-time equivalent is 2080 hours, and this is considered only if the employee labors eight hours per day, five days a week. The easiest equation to use in this case is to multiply the number of hours that employee labors per day, 8 hours for whole-time members of the staff, with the number of days that they work per week, 5 days per week for whole-time employees, and multiply all of that with the number of weeks that they labor in one year, which is 52. So, when you multiply 8, 5, and 52, you will get to the 2080 number which is a standard for whole-time personnel.
People who work full-time are usually referred to with the standardized full-time equivalent figure, which is 1.0, whereas personnel who labors only half time get the figure of 0.5.
1.0 FTE means that the employee is working with full capacity or eight hours per day, and those who labor with 50% capacity are considered as 0.5 FTE.
By using platforms like howtodiscuss.com, you can learn more not only about the annual full-time equivalent, but you can get a lot more reliable information that will help you clarify financial questions that you may have, and you will learn how to run your business better, and how to handle your budget with ease.
If you want to make the enumerations faster for all of your employees, then you first need to check how many whole-time members of the staff you have. Then, you will need to multiply that number by 8, or the hours per day that they work, and once again, multiply that digit with the number of days that they labor. This will help you find out how many people you would need to finish a project if you know how much time that project will take.
For example, if you know that something will take about 1000 hours to finish, and you are not aware of how many people are going to be needed to get this done, the FTE enumeration will help you find out the exact number. If we follow the equation that we mentioned before, it should look something like 8*(number of whole-time workers)*(number of days that the employees work)=1000. The digit that you should end up with should be 125, which means that 12 people who work whole-time, and one person who works irregular schedule should be able to get the job done in ten days.
As you can see, all of this information can help you a lot when it comes to allocating employees for a specific project, and it can help you find out how big of a budget would you need to assign for a specific task. Even though sometimes it may sound like this is a pretty complex thing you need to do, once you start doing it, you will see that with one simple equation you will be able to get all the information needed. You can later use that data to analyze your expenses and to create solutions when it comes to specific projects or tasks.
Remember that if you don’t have time to do this on a large scale, or if you don’t know how to, you can always consult with a financial advisor or hire a service that will do all of these enumerations on their own. This will save you a lot of time and money, and you will be able to focus on more important things when it comes to having your brand. By implementing full-time equivalent determinations, you will get a better idea of how many members of the staff you have, how many more you would need to hire for a specific project, and how you can allocate them depending on their annual hours and their overall labor assignments.