What FTE means, and how it's calculated
FTE stands for full-time equivalent. It's a way of measuring work in people instead of hours. One FTE is the work of one person working full time for a month. With 8-hour days and 22 working days, that's 176 hours.
The calculation is two divisions:
- Hours saved a month = hours the work takes today − hours it still takes with automation.
- FTE freed = hours saved a month ÷ hours in one FTE month.
Example: a team handles 120 jobs a day at 10 minutes each. That's 120 × 22 × 10 ÷ 60 = 440 hours a month, or 2.5 FTE of work. If automation finishes 80% of the jobs and someone spends a minute checking each one, the work drops to about 123 hours. 440 − 123 = 317 hours saved, and 317 ÷ 176 = 1.8 FTE freed.
Getting the inputs right
- Jobs: count them from your system, a ticket queue or a week of logs. Averages are fine.
- Time per job: time five real jobs with a stopwatch. Estimates from memory are usually too low.
- Share automated: be honest. Jobs the automation can't finish go back to a person at full time, and that's the number most business cases inflate.
- Money: use the yearly cost of one employee (CTC) if you know salaries, or the cost per job if you pay per job. Leave money off entirely if you only need FTE.
Freed time isn't fewer people
An automation that frees 1.8 FTE rarely means 1.8 fewer people. Freed time usually goes to work that was waiting: backlogs, quality checks, the customers nobody had time for. The FTE number sizes the effect so you can compare options. A business case that says this plainly is more credible than one that promises headcount cuts.
Where this comes from. This is the arithmetic I use to size automation work. The hardest input is the share automated, and it's easy to flatter. This post is about measuring it honestly, and the S&P Global case study shows the same sums at scale.
Questions
What does FTE mean?
Full-time equivalent: the amount of work one person does in a full working month. With 8-hour days and 22 working days, 1 FTE is 176 hours a month. Work that takes 88 hours a month is 0.5 FTE, whether one person spends half their time on it or four people spend an eighth each.
How do you calculate FTE saved?
Hours saved per month divided by the hours in one FTE month. If automation saves 264 hours a month and one FTE is 176 hours, that's 264 ÷ 176 = 1.5 FTE. The calculator shows this step with your own numbers.
Does freeing 1.5 FTE mean 1.5 fewer people?
Usually not. Freed time tends to go to work that was waiting: backlogs, quality checks, customers. The FTE figure tells you how big the effect is, not who leaves. Saying that plainly in a business case makes it more credible, not less.
What should I put for the share the automation handles?
The share of jobs it finishes with nobody touching them. The rest go back to a person at full time. If you don't know yet, 70 to 90% is realistic for a well-built automation; 100% almost never happens.
Which cost should I use, CTC or cost per job?
Use CTC (the yearly cost of one employee, including benefits) if you know salaries. Use cost per job if you pay per job, for example to an outsourcing partner. Both are turned into a cost per hour of work, shown in the working.
Is anything I type saved?
No. Everything stays in your browser. The share link carries the numbers in the link itself, so only people you send it to can see them.