Headcount is a simple count of how many people a business employs - every person counts as one, whether they work full-time, part-time, or on a fixed-term contract. It answers "how many people" rather than "how much work capacity."
What it means
Because headcount treats every person equally regardless of hours, it can overstate or understate true capacity compared with full-time equivalent, which weights people by the proportion of full-time hours they work. Both measures are used together in workforce planning and budgeting.
Where it fits in
Headcount is tracked by cost centre and used to budget the payroll bill at a department level, and it is the figure typically reported when a business talks about how many staff it employs, separate from the FTE figure used for capacity planning.
Key rules
- A simple count of people employed, regardless of hours worked.
- Differs from full-time equivalent, which weights by hours.
- Tracked per cost centre for budgeting and reporting.
- Used alongside FTE, not as a substitute for it, in workforce planning.
