Net Expense per full-time employee measures the average amount of expenses incurred by a business for each full-time equivalent (FTE) employee. It is calculated by dividing the company's total net expenses by the number of full-time equivalent employees.
This metric helps assess how much the company is spending per employee, which can be useful for budgeting, cost control, and financial planning. A lower amount suggests more efficient use of resources, while a higher value might indicate rising costs or inefficiencies that need to be addressed. It is often used alongside Net Revenue per FTE, to evaluate the overall financial health and operational efficiency of a business. Obviously the value should be lower than your Revenue/FTE metric, meaning the business is making a profit.
Net Expenses per Full-time Employee = Net Expenses / No. of Full Time Employees
So Net Expenses/FTE indicates how much money your business spends per employee.