A Full-Time Equivalent Is 2,080 Work Hours Annually

The magical number for one full-time equivalent (1-FTE) professional is 2,080 work hours annually — 40 work hours per week for 52 weeks in a year.

Professionals can work extra hours during non-vacation weeks to make up for opportunities lost during vacation weeks. For example, 1-FTE can work 52 work hours per week for 40 weeks in a year to accrue a 12-week annual vacation, while 0.5-FTE will need to work 52 work hours per week for 20 weeks in a year to accrue a 32-week annual vacation.

Regarding compensation packages: say a system needs 42 1-FTE professionals at 2,080 work hours annually per professional for a system-wide total requirement of 87,360 work-hours annually wherein the system wants to distribute $13,104,000 system-wide annually.

Herein, if the system spends $312,000 per 1-FTE annually with a directly paid salary per 1-FTE including incentives is $26,0000 annually, while $52,000 per professional annually being indirectly paid by the system in the form of benefits (like health care, disability and liability insurances, and retirement savings contributions). Work-hour rates will be $150 per work-hour for each extra work hour beyond 2,080 annual work hours for any 1-FTE professional.

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If the system hires work-life balance seeking 0.5-FTE professionals, directly paid salary for 0.5-FTE including incentives for 1,040 annual work hours will be $104,000 and NOT $130,000 because $52,000 per professional annually has been indirectly paid by the system in the form of benefits.

Anyhow, 0.5-FTE professionals will get $150 per work-hour for each extra work hour beyond 1,040 annual work hours.

The system can even allow workaholic professionals to become, say, 1.25 FTE by working for 2,600 work hours annually with extra 520 work hours annually paid at $150 per work-hour. Thus, adding $78,000 to their directly paid salary.

In the same system, this universal rate of $150 per work hour will be applicable to locum tenens professionals filling in for the emergent needs of the system, just like for the 1-FTE or 0.5-FTE professionals, the system may accrue one-time extra-expense for credentialing and enrolling the directly contracted locum tenens professionals without accruing the administrative overcharges of contracting through their locum tenens groups.

The system-specific universal rate also gets rid of higher rates for working overnights or on weekends/holidays. Because if regular work-day has eight work-hours for 1-FTE professionals, (a) each 24-hour call-day on Mondays, Tuesdays, Wednesdays, or Thursdays with post-call off-day adds extra eight work-hours to cumulative annual work-hours; (b) each 24-hour call-day on Fridays adds 16 work-hours to cumulative annual work-hours; (c) each 24-hour call-day on Saturdays or long-weekend Sundays or 8-hour incentivized federal holidays adds 24 work-hours to cumulative annual work-hours; and (d) each 24-hour call-day on regular weekend Sundays with post-call-off day adds 16 work-hours to cumulative annual work-hours.

Interestingly, a naive avenue is establishing independent benefits management corporations for not only professionals working under various ratios of FTEs but also to professionals working as locum tenens who all buy the benefits.

In the above-mentioned example, the directly paid annual salary will become $312,000 per 1-FTE rather than $260,000 per 1-FTE and $156,000 per 0.5-FTE rather than $104,000 per 0.5-FTE where not only 1-FTE and 0.5-FTE professionals but also locum tenens professionals will have the option to buy the benefits by paying $52,000 annually to the independent benefits management corporation. However, professionals will be surrendering the advantages of pre-tax deductions.

The next question arises: what must the system do if the current rate of about $150 per work hour is not attracting any professional to work for them. Then the systems must make a time-limited contingency plan where the work-hour rates can be supplemented with supplemental work-hour rates of $50 per work hour extra temporarily added to the permanent work-hour rates of $150 per work hour.

The professionals may stake the claim that the revenues generated by them cannot be equitable because of various reasons beyond their control. With that, annual bonuses as aligned to the revenues generated by professionals can be directly paid at the end of the year.

For example, in the above-mentioned example, say the system has generated $16,758,000 in a particular year at which point $13,104,000 has already been distributed among 42 1-FTE professionals and $2,793,000 has been distributed among administrators to accrue 17% administrative costs — leaving $861,000 to be distributed as a revenue-aligning bonus (RAB) to 42 1-FTE professionals.

Here, the lowest revenue-generating professional will get $0 as RAB, while the higher-up professional who generated $1,000 more than the lowest revenue-generating professional will get $1,000 as RAB. The next up professional who generated $2,000 more than the lowest revenue-generating professional will get $2,000 as RAB and so on and so forth. Until the highest revenue-generating professional who generated $41,000 more than the lowest revenue-generating professional will get $41,000 as RAB — totaling to $861,000 distributed as RAB to 42 1-FTE professionals.

Similarly, seniority bonuses (SB) can be designed too — when at the end of the year, the cumulative work-hours since last time joining the system can decide the value of SB. For example, if the system plans to have $861,000 distributed as SB to 421-FTE professionals in a given year, the most recently joined professional with zero cumulative work-hours will get $0 as SB, while the next up professional with 2,080 cumulative work hours worth one uninterrupted year on the job will get $1,000 as SB. Then the higher-up professional with 4,160 cumulative work hours worth two uninterrupted years on the job will get $2,000 as SB so on and so forth. Until the very first joined professional with 85,280 cumulative work hours worth 41 uninterrupted years on the job will get $41,000 as SB — totaling to $861,000 distributed as SB to 42 1-FTE professionals.

It is time to train more professionals to meet the demands of society during unending times of shortages so that 1-FTE professionals can be limited to 2,080 work hours annually.

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