What is an FTE in Software Engagement?

Companies hire two types of employees – part-time employees and full-time employees. Both types need to be paid but their scope of operations and subsequent workload vary. So how do you determine their pay check based on their output?

Full Time Equivalent or FTE is a method by which businesses can determine the amount of workload an employee should be given. By using FTE, managers can gauge the workload per employee and its effect on the rest of the team and the whole organization.

While there are many aspects of FTE, it all boils down to two primary angles – wage determination and accounting. Another advantage of calculating FTE is that it allows you to predict your company’s future workload. Depending on the workload, you can gear up the management to meet that goal.

Advantages of Full Time Equivalent (FTE)

There are many advantages of implementing the FTE model. This technique enables a company to manage their accounts properly (as per the budget) and improve operational performance. In the long run, an organized FTE system can help drive the sales to profit.

Apart from that, FTE is important due to the following reasons –

Allocation of Human Resources in Different Departments

FTE ensures you do not waste your budget on employees by paying them according to their work. By using this model, you can calculate the exact number of employees required for a task and assign them immediately.

It also helps human resources identify which job profiles need to be full-time and which ones are better suited for part-time. This way, your company does not waste money on employees who are not required.

Allocation and Management of Projects

The number of projects a company can handle depends on the available workforce and their abilities. If you are not sure as a company, you can use FTE to determine how much work your employees can handle. Based on that information you can choose to take up projects which your company can successfully deliver.

Allocation, Management and Prediction of Budget

Every employee working in a company has a CTC (Cost to Company). This factor varies according to experience, role and designation. For instance, the more experience an employee has the faster they will complete the work.

The FTE method enables managers to identify such experienced and efficient employees, while keeping the budget restrictions in mind. Once such an employee is on board, the FTE model can help in deciding the amount of work that employee should be given. 

For more information, please visit