Glossary
What is an FTE-month?
One full-time person working for one month — a capacity unit that is comparable across teams and, where cost is recorded, is the multiplier a cost forecast would use.
Unlike story points, which are deliberately team-local and have no monetary meaning, FTE-months can be summed across teams and multiplied by a monthly cost. They are coarse on purpose: the granularity broadcasts its own error bar.
How to calculate FTE-months
Gross capacity first: headcount multiplied by the months in the period. A team of six over a quarter has 6 × 3 = 18 FTE-months. Then subtract what is already spoken for — the support rotation, run-the-business work, booked holidays, the standing meeting load — and an interruption reserve if you have no data yet (twenty per cent is a defensible opening claim). What remains is the honest line: the capacity that can actually be promised.
Sizing a demand works in the same unit: two people for two months is 4 FTE-months, whichever two people it turns out to be. One decimal place at most — an FTE-month estimate with two significant figures is claiming a precision the unit deliberately does not have.
When to use FTE-months — and when not to
Use them at the altitude where a promise is being made to someone outside the team: commitment decisions, quarter plans, budget conversations. That is where the unit's three properties pay: it sums across teams, it converts to money in one multiplication, and its coarseness keeps the conversation honest.
Do not use them inside a sprint. Task-level work is better served by whatever relative sizing the team already calibrates against its own history — the units answer different questions, and neither replaces the other.
Related terms
- Allocation vs consumption — Allocation is what people are committed to; consumption is what they spent. Delivery governance measures allocation and deliberately does not measure consumption.
- Capacity planning — Establishing what each team can honestly promise for a period — gross FTE-months minus what is already spoken for — and committing demands against that line in priority order.
- Capacity line — A team's honestly available capacity for a period, stated in FTE-months — the constraint that commitments are walked down against, in priority order, until it is spent.
This definition comes from building DeliverySheet — it takes a vague work request to a clear delivery decision, so the shape, owner, capacity, dependencies and open questions are on the table before anyone commits people or a date.
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