FTE-based pricing charges for outsourcing services according to the number or equivalent capacity of full-time personnel assigned to the work. Rates may vary by role, location, shift or experience. The model is straightforward when workload and staffing remain stable.
How is FTE-Based Pricing applied?
The agreement sets a price for each full-time-equivalent unit assigned to the service, often with rules for role, location, productive hours and partial periods. Monthly charges are calculated from the approved staffing baseline and adjustments. The model makes capacity visible, but the client still needs service measures because paid headcount alone does not prove output or quality.
What records support FTE-Based Pricing?
Record the FTE definition, productive hours, roles, rates, locations, utilization assumptions, vacancies, overtime, supervision and annual adjustments.
What does FTE-Based Pricing not establish?
The buyer carries much of the productivity and volume risk. Paying for seats can preserve inefficient work unless improvement obligations are separate.
