Total number of permanent FTE of your company at year end FTE (full-time equivalent) and headcount are both methods used to count members within an organization. The key difference is that FTE refers to the number of full-time hours being worked, while headcount is the number of employees in an organization.

  • Radia Guira

A full-time equivalent, abbreviated as FTE, is a unit to measure the total amount of full-time employees working at one organisation. It is a way of adding up the hours of full-time, part-time and various other types of employees into measurable ‘full-time’ units. One FTE is equivalent to one employee working full time.
The formula to calcule FTE is:
FTE = total actual hours worked / total full-time hours
A company has a team of five people. Three of them work full-time (40 hours per week respectively) and the rest work 10 and 5 hours in total.
If you want to calculate the FTE, you first need to know how many actual hours have been worked by those five employees. Assuming they strictly complied with their timetable, you have 40 + 40 + 40 + 10 + 5 = 135 effective hours worked. Knowing that the full working week is 40 hours, you can apply the FTE formula:
135 actual hours worked / 40 hours of full-time = 3.37

The question « Total number of permanent FTE (full-time equivalent) of your company at year end » is asking for the aggregated number of full-time employees in your organization at the close of the most recent fiscal year. This count involves solely full-time employees who have permanent contracts, excluding those on part-time or temporary contracts.

To provide clarity, FTE is a measure that is used to count the total number of full-time employees within a company. Instead of simply counting the number of employees, this method takes into account the actual work hours, focusing solely on those working full-time hours. In contrast, headcount is a simpler form of counting that includes all employees regardless of work hours or contract terms.

For instance, if you’re responding to this question, you might say: « As of the end of the last fiscal year, our company has a total of 350 permanent full-time equivalent employees. » It is crucial to ensure the data provided is accurate and represents only full-time, permanent employees.

(Example: 350 full-time equivalent employees)

Understanding FTE and Its Importance in ESG Reporting

When it comes to reporting on environmental, social, and governance (ESG) standards, understanding the concept of Full-Time Equivalent (FTE) is crucial. Unlike simple headcount, which tallies the total number of individuals employed by a company, FTE measures the number of full-time hours worked or equivalent, providing a more nuanced view of the workforce. This is particularly important for ESG assessments, where the size and nature of a workforce can impact a company’s social score. For more detailed information on the differences between FTE and headcount, you can read a thorough comparison at AIHR’s FTE vs. Headcount guide.

Reporting the total number of permanent full-time equivalent (FTE) employees at year end gives stakeholders a clear picture of the company’s labor force in terms of full-time work commitment. It allows for a more standardized comparison across different organizations or departments that may have varying employment arrangements. Understanding your company’s FTE will not only aid in ESG reporting but will also contribute to better workforce planning and management. To dive deeper into what constitutes an FTE and why it’s essential, visit Indeed’s comprehensive article on FTE.

Calculating Your Company’s FTE for ESG Reporting

Calculating the total number of permanent FTEs at your company involves accounting for all the hours worked by full-time, part-time, and temporary employees within the year and converting them into full-time equivalent terms. A standard full-time schedule typically involves 40 hours of work per week, but this can vary depending on country and industry standards. To accurately calculate FTE, add up the total hours worked by all employees (including overtime) and divide by the number of regular full-time hours. For example, if two part-time employees each work 20 hours per week, together, they are equivalent to 1 FTE.

It is important to note that only permanent employees (those not on a fixed-term contract) should be considered when calculating the year-end FTE for ESG reporting purposes. This ensures consistency and comparability across reporting periods and between different organizations. Seasonal fluctuations can be accounted for by using the average number of employees over the reporting period. For a step-by-step guide on calculating FTE for your business, you may find the resources on beneficial.

Best Practices in Reporting FTE for ESG Consideration

Accurate reporting of FTE is vital for ESG considerations as it reflects the company’s commitment to fair labor practices, equality, and human rights, which are integral components of the ‘Social’ aspect of ESG. When reporting FTE, it’s best to follow a consistent methodology that aligns with international standards and guidelines, such as those set forth by the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB).

In addition to calculating the total number of permanent FTEs, companies should also provide a breakdown of this number by employment type, location, and gender, if possible. This allows for a more detailed analysis of the company’s social impact. Furthermore, discussing any significant changes in FTE over the reporting period, such as major hirings, layoffs, or restructurings, can provide context to stakeholders on how the company is managing its workforce in alignment with its ESG goals.

Finally, transparency in reporting, including clear explanations of the methodology used and any assumptions made during calculations, ensures that stakeholders can trust the reported data. Ensuring accuracy in your FTE reporting can bolster your company’s reputation and contribute positively to your overall ESG score. By providing a true reflection of your company’s workforce, you lay the groundwork for more informed decisions by investors, consumers, and other stakeholders who consider ESG criteria in their evaluations.

With the right approach to understanding, calculating, and reporting FTE, your company can not only enhance its ESG profile but also gain insights into workforce efficiencies and labor costs. As the importance of ESG continues to grow, being adept in these areas will be increasingly valuable for businesses seeking to demonstrate their commitment to sustainability and ethical practices.