Fte software estimation

FTE is calculated by taking the total number of hours worked by part-time employees in a week, month, or year plus the total number of hours worked by full-time employees and dividing by the average number of hours worked by full-time employees. For a year, that is 2, hours with hour workweeks and 1, hours with hour workweeks, which is considered full-time for ACA reporting.

The first step in calculating FTE is to make a complete list of all employees. These are individuals who are paid using a year-end W-2 form. Do not include contractors. Also, do not include yourself as the business owner, unless you are paid a salary and receive a W For the purposes of this calculation, include any approved leave, such as sick leave or paid time off in the total weekly hours.

This information provides the basis for calculating your FTE. For the purposes of calculating FTE, most employers consider a full-time employee one who works between hours a week.

In the chart below, because both Carole and Lynn are full-time employees, they would each be counted as one FTE. This could be an employee who works 20 hours a week, an intern who works one day a week, or an employee who is on call or only works weekends.

It could also be a temporary staff member who works an irregular schedule. In our example, Jimmy and Marta would be considered part-time employees. To determine your total FTE, add the total part-time hours worked, plus the total full-time hours worked. From there, if your full-time hours are 40 per week, divide the number by 2, If your total full-time hours are 30 per week, divide the number by 1, This will give you your total FTE for all full- and part-time employees for the year.

During the year company hired two part-time employees that worked 20 hours each per week for 50 weeks and hired three part-time employees that worked 18 hours each per week for 40 weeks. Also, the company has three full-time employees. Calculate the full-time equivalent per year of the company for the mentioned period? Step 1: Converting the number of hours which are worked by the part-time employee in the company into the full-time basis using the below-mentioned formula:.

The calculation of FTE is important in resource management as well as in project management, especially when the decisions related to the employment of the staff are to be taken as it helps to calculate the total number of personnel required for completion of the work in the available period of time. Also, FTE also helps in estimating the total labor cost Labor Cost Cost of labor is the remuneration paid in the form of wages and salaries to the employees.

The allowances are sub-divided broadly into two categories- direct labor involved in the manufacturing process and indirect labor pertaining to all other processes. Moreover, in the cases of companies, those are having a large number of part-time employees; the FTE helps to know how many part-time employees are equal to full-time employees.

Software estimation traditionally has been done in terms of hours, then converted to days , finally concluded as FTE Full time equivalent count.

This means, how many developers , with what level of expertise, and how many days needed to deliver a software feature. After that its easy to estimate the budget, and this drives the decision , whether even making that feature is worthwhile and will give a good ROI return on investment.

So we first define the scope, then estimate , next the resources needed are identified ,which finally decides the budget. So the budget is similar to Capex capital expenditure , what you decide to invest upfront in the beginning. In agile, the above flow is quite reversed. Here first we set up a fixed team , then we define a list of required features, from a high to low priority, and the team constantly keeps picking up the higher priority features from the list.

Hence in the first few steps of setting up agile delivery , we are moving away from the traditional project budget mindset, as we are planning to keep a constant team to continuously evolve the product.

Now this fixed team still has to estimate , to get an understanding , of the how much it can deliver on an average, over a fixed duration. Based on this, the team is given the future scope to deliver, and once the team estimates it in story points , it gives as idea that how long it will take to deliver future scope. So the important question is, how to estimate in story points, and do they map to hours of work. Well, the answer is no, it is not supposed to map to hours of effort, it is more linked to the complexity of the delivery, which allows the developer to focus on the delivery complexity factors , rather than trying to focus on converting the complexity to hours.

While seeking out the best possible employees for your company, closely track your expenses and add these into your cost per employee numbers. Salary : Basic compensation probably makes up the bulk of your employee costs.

When hiring, make sure to keep the amounts you pay new and existing employees close to avoid workplace drama and hurt feelings. Remember: hiring more employees may mean you won't afford raises for your current staff. When hiring for startups, balance the risks of working with a new potentially unstable business with equity compensation. Increase your employees' personal investment in your company in the form of performance shares. Of course, you can also provide restricted shares in your company's stock as well as options.

Factor in Workmen's Compensation insurance premiums. Remember, these numbers vary by employee type; you pay much more to insure factory employees than office employees.

Your company may also reimburse employees for certain education costs. Remember, even though vacation time is a benefit, you've probably already taken it into account in as part of basic salaries. Facility Space : If you hire at-location employees consider going remote , you need to provide them with a safe and productive work environment. As I mentioned in the above example, your imaginary fidget spinner company should compare its square feet per employee with other businesses in your niche.

Offering more workspace to your employees costs more, but can increase their productivity and retention; balance these factors by carefully researching your competitors. When calculating employee costs, divide your facility costs including furniture by your number of employees using FTE, as I did in the example.

Include device costs, software updates periodic but expensive , and installation costs for office communication systems. If you provide uniforms, safety equipment, or other wearables, be sure to account for these in your employee cost calculations. After examining the above aspects of employee costs, you can calculate your employee costs -- but you certainly don't want to go through this lengthy research process every time you consider making new hires. Though estimates are estimates, you can get a quick picture of your employee cost with simple multipliers.

Use the data you gathered for the last section's analysis to create benchmarks for timing your hiring decisions. For example, you could use a 1. You could then apply a 1. You could apply a 1. Obviously, these multipliers only provide a rough estimate of your costs -- and vary widely from the office to the factory floor.

An experienced CFO see the "Employee Cost Tips from Toggl Track" section below develops and updates these "rules of thumb" over time as they get to know the ins and outs of their business -- making them a high priority for retention.