How often do managers come to you asking for additional hires? How do you decide whether or not to approve the hire?


How do you/managers keep an eye on overtime? Is there an acceptable amount of overtime for each area?


Let’s say you knew each manager’s trend in the amount of overtime their team was working and whether or not it was enough to hire another person. What impact would that have?


With the platform, it’s easy to answer these questions above. Let’s start with the basics.


What is Full-Time Equivalency (FTE)?

Time-Based FTE is the employee full-time equivalency of hours for a time period. Simplified, the calculation would be the employee’s total hours worked, divided by the standard number of worked hours for a full-time employee (e.g., 40 hours per week).


For example, in one week (e.g., 5 worked days) you would work 40 hours. Let’s say you worked 34 hours over one week and you are a full-time employee. So, your full-time equivalency would be 34 hours/40 hours or .85 FTE for the week.  


In another example, let’s say you worked 10 hours per day for one week. Your full-time equivalency would be 50 hours/40 hours or 1.25 FTE for the week.


FTE enables you to better understand whether or not you should be hiring additional headcount to make up for work that has to be done, or if you should let people go because there are too many people and not enough work.


It is also important to note that monitoring FTE is most effective when it is analyzed over an extended period of time. This is where you will notice trends in your FTE and see if there is a consistent need week over week or month by month.


Understanding Overtime FTE

One of the most important use cases for FTE is Overtime FTE. Overtime FTE is the full-time equivalent of overtime hours incurred.


This allows you to monitor whether a full-time employee is clocking more than the number of hours they should clock in a time period like over 8 hours per day, over 40 hours per week or over 2,080 hours per year. For example, if an employee is clocking 80 hours per week every week, it could make sense to hire another headcount so instead of paying 40 regular hours and 40 hours of overtime per week, you are paying 80 regular hours across two employees.


Hiring an additional headcount can help your team become more productive, but also ensure that you are staying on your labor budget.


Let’s say your employees make $15/hour. That means one employee makes $600/week. If that same employee works 40 hours of overtime that equals an additional $900/week. By adding a new hire, you would save $300/week, and if you incurred 40 hours of overtime per week per year, it could be up to $15,600 in savings for the year.


How to monitor FTE in

For background, would be constantly combining your labor, timekeeping and production data from your POS or CRM and your ERP. So, you can quickly monitor key metrics like:

  • Units Per Hour
  • Units Per Hour by Employee
  • Overtime FTE
  • Overtime by Department
  • Overtime by Employee

To put this into practice, watch the video below to see how can help you monitor Overtime FTE so you can improve productivity and better understand when it makes sense to staff up or down.




That's Why We're Here

At, we uniquely understand the need for manufacturers and distributors to better monitor full-time equivalencies.


With our first-ever, cross-functional labor efficiency and worker productivity platform we break down data barriers and organizational barriers to set up operations managers for success. This means businesses can arm their leaders with real-time insights by alerting leaders in all departments of staffing shortages, labor overages, and productivity trends to better manage their organizations.


If you’d like to learn more about how we calculate full-time equivalencies or discuss how will work for your organization, reach out to us. We’re eager to connect with you. If now is not the time to consider new software but you liked what you read here, subscribe to our blog below.

Originally published December 18, 2020.

Written by Natalie Ostoic

Outside of spending hours reading new trends in product and experiential marketing, I consider myself a true foodie in every way. Want to know which restaurant has the best aesthetic to food quality ratio? Or, looking for the best coffee in town at the most affordable price? I'm your girl!