Glossary
Workforce planning glossary
Plain definitions of the terms HR and Finance use to plan headcount, workforce costs and pay. With formulas, worked examples and sources.
Compa ratioCompa ratio compares an employee’s salary with the midpoint of the salary band for their role: salary divided by midpoint. A value of 1.0 (100 %) means the salary sits exactly at the midpoint. Below 1.0 it sits under the midpoint, and above 1.0 it sits over it. HR and Finance use it to see where pay stands within a band and to plan salary increases.Pay & compensation structure
Full-time equivalent (FTE)A full-time equivalent (FTE) expresses a person’s contracted working hours as a share of one full-time position: 40 contracted hours in a company with a 40-hour week is 1 FTE, and 20 hours is 0.5 FTE. HR and Finance use FTE instead of headcount to plan capacity and workforce costs, because part-time contracts make a plain headcount misleading.Workforce & headcount planning
Variance analysisVariance analysis compares actual results with planned values, measures the gap and identifies its causes. HR controlling and FP&A teams use it to explain why costs differ from the budget and what to do about it. For workforce costs, the gap is usually split into headcount, timing and pay effects, so that the cause is clear, not only the amount.HR controlling & people metrics