The full-time equivalent, or FTE, is the number of hours worked by a full-time employee. When businesses employ numerous part-time employees, it is often beneficial to understand how the hours worked by these part-time employees translate into the equivalent number of full-time employees. The FTE metric is used in numerous other metrics and calculations and is useful for budget analysis, project scheduling, industry analysis, and when comparing the number of FTEs to such things as office square footage, revenues, and profits.
Generally, an FTE is considered to have a theoretical maximum of 2,080 hours. This number is found by multiplying 8 working hours per day by 5 working days per week by 52 weeks per year. 8 * 5 * 52 = 2,080. However, some organizations use a lower figure to account for vacation days, sick days, and holidays.
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