Understanding FTEs

One of the first things I do when I work with someone new in a Casino or Hotel is to ask them what an FTE is, and - don't laugh - more often than not what I hear in response is "an FTE is a Full Time Employee."

Now in the labor management game we all know that the term FTE stands for Full Time Equivalent, but it never hurts to ask just to make sure everyone is on the same page. I recently worked with a hospitality group whose senior leadership had for years conducted detailed FTE reviews with their line operators; imagine their surprise when it was pointed out that many in their organization did not know what the term FTE actually meant!

For reference, the Government's definition of the term FTE is available at the National Parks Service Budget Glossary.

Even more interesting is when I hear or see the term Daily FTE. As an FTE exists only in a minimum of 40 worked hours (anything time period less would essentially represent either shifts or headcount), be especially careful when you encounter this concept, the user is probably using a daily Salary calculation to return the result.

I like to compose FTEs with Regular (worked), Hours plus Overtime Hours, in this way I can offset the Actual FTEs with Forecast, Scheduled, or Standard FTEs and have the labor effectiveness reporting become meaningful. I have, however, worked with Properties who include certain types of Training Hours in their FTE calculations, and, at times, I have seen Property Finance Departments include other benefit hours into the calculation (typically this happens on Daily Operating Reports).

Moral of the story - take the time to ask, do not always assume you are on the same page as your audience.