NSG 6620 Week 4 Discussion Question 2: Strategies for Establishing an FTE Budget

Budgeting is a critical and essential component of nursing and patient care. Without proper support for nurses to provide patient-centered care, the organizational mission and goals will not be met.

Full-time equivalent (FTE) measures the number of employees working in an organization, assuming they all work on a full-time basis. It measures each employee’s involvement in the organization. Unit managers and CNOs must have fundamental skills and competencies to establish an FTE budget.

Using the readings for the week, the South University Online Library, and the Internet, respond to the following:

Describe various strategies used for establishing an FTE budget.

Examine the advantages and disadvantages of each strategy.

Discuss how the unit manager or CNO elicits input into the FTE budget.

Describe one software program utilized by the unit manager or CNO to formulate an FTE budget.

Identify the timeline a nurse manager or CNO would utilize to plan the development of an FTE budget.

Comment on the postings of at least two peers.

Evaluation Criteria:

Described various strategies used for establishing an FTE budget.

Examined the advantages and disadvantages of using each strategy.

Discussed how the unit manager or CNO elicits input into the FTE budget.

Described one software program utilized by the unit manager or CNO to formulate an FTE budget.

Identified the timeline a nurse manager or CNO would utilize to plan the development of an FTE budget.

Justified your answers with appropriate research and reasoning.

Commented on the postings of at least two peers.

ADDITIONAL DETAILS 

Strategies for Establishing an FTE Budget

Introduction

If you want to create an effective FTE budget, you need to start with an accurate headcount and identify the work effort. There are several steps involved in this process; the goal is to get the most accurate estimate possible.

Identify current headcount and quantify the work effort.

An FTE budget is the amount of time it will take your team to complete a project. It’s important to understand that not all projects are equal, so you’ll need to factor in how long each one takes into account when calculating your FTE budgets.

To calculate an effective FTE budget for your team, first identify current headcount and quantify the work effort. This will help ensure that your department is operating at optimal capacity as well as give insight into what resources are needed from other departments (or outside vendors).

Get input from the workforce.

It’s important to gather input from the workforce. There are many different ways to do this, including:

• Focus groups and surveys

• Interviews with employees at all levels of the organization

• Social media platforms like Facebook and Twitter can also be used as a source of information about what people want in their work environment. You might ask employees if they have any suggestions or concerns that weren’t already addressed during their usual exit interviews or other workshops where you’ve asked them questions such as: “What do you think would make things better?” or “What would improve efficiency?”

Develop job descriptions and classifications.

• Define the job.

• Define the skills required.

• Define the responsibilities and qualifications required to perform that function effectively, including any special requirements such as certifications or licenses.

• Create a job description that includes all of these elements in one place so you can use it when communicating with potential employees or clients about what they’ll be doing on your team (or not doing).

Use the job description to recruit and hire. This will help you attract candidates who are qualified for the job, which can save time and money in the long run. Communicate with current employees about their roles on your team by providing them with a copy of their job description so they know what’s expected of them.

Use these steps to create an FTE budget that works.

• Use a spreadsheet to calculate headcount.

• Calculate hours.

• Calculate FTE (full-time equivalent).

• Create your budget using the time and cost formulas, then add up all of your costs in that column and use those figures as an estimate for what you will need next year.

Once you have your current headcount and workload, it’s time to calculate an FTE budget. To do this, simply divide the total work effort by your team’s total number of hours in one year (including holidays). The result will be a dollar amount that represents the cost associated with running your department for a full yearThe formulas are pretty simple, but they can get complicated if you have a lot of employees. To make it easier on yourself, break up the calculations into separate spreadsheets that can be used to calculate different categories of costs.

Conclusion

Now that you’ve got a better idea what an FTE budget is and how it can help you improve your organization, it’s time to get started. Start by identifying how many people are currently working for your company, then determine how much work they do in an hour (or day). These numbers will help you understand where your organization needs the most improvement so that you can make improvements on a budget. In the end—whether you decide to use one or two budgets, or go all-in with three—the important thing is that the process works for everyone involved!

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