Definition This KPI measures the average cost of each full-time equivalent employee for a specific business entity.
Calculation Total personnel cost / Total number of full-time equivalent employees
Unit of Measurement US dollars
Function Reward and retain employees – HR
Method of Estimation The personnel cost is calculated by summing up the salaries, benefits, and other costs associated with employees. The full-time equivalent employees are calculated by dividing the total number of hours worked by full-time employees by the standard number of hours worked per full-time employee.
Timeframe This KPI is typically calculated on a monthly or annual basis.

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