Turn scheduled hours into usable capacity
Scheduled hours are the time allocated to the team. Productive hours are the portion available for the work being planned after your chosen exclusions. If the team has 400 scheduled hours and 20% is unavailable for the target work, usable capacity is 400 × 0.80 = 320 hours. Breaks, meetings, training and absence can contribute to unavailable time, depending on what your starting hours already include. This is a workload planning model, not a payroll deduction.
Calculate the capacity needed to close the gap
With demand of 360 productive hours, the example team is short by 40 productive hours. Adding 40 scheduled hours is insufficient if added time has the same 20% shrinkage: it supplies only 32 productive hours. The required schedule is 360 ÷ 0.80 = 450 hours, a 50-hour increase. At a 40-hour full-time baseline, the requirement is 11.25 FTE and the increase is 1.25 FTE.
Use the result as a planning scenario
A fractional FTE measures hours, not a guaranteed hiring decision. Additional capacity might come from part-time work, changing assignments, reducing avoidable meetings or recruiting. Check skill availability, when the work arrives and minimum coverage by shift before choosing an action. A weekly surplus does not prove that every hour of the week is covered. This model also does not estimate queue waiting times or service levels.
Choose a defensible shrinkage assumption
Measure unavailable hours over the same period and denominator as scheduled hours. If paid leave has already been removed from your starting schedule, do not remove it a second time through shrinkage. Use mutually exclusive categories or deduplicate overlapping records. Try a lower and higher rate to see how sensitive the plan is. A 100% rate is rejected because no productive capacity remains and a finite staffing requirement cannot be calculated.
Frequently asked questions
What is the formula for staffing shrinkage?
Shrinkage percentage = unavailable hours ÷ scheduled hours × 100. Productive capacity = scheduled hours × (1 − shrinkage percentage/100).
How do I calculate required FTE with shrinkage?
Divide productive hours of demand by the available fraction, then divide by weekly full-time hours. For 360 hours of demand, 20% shrinkage and a 40-hour baseline, 360 ÷ 0.80 ÷ 40 = 11.25 FTE.
Is shrinkage the same as utilization?
No. In this model shrinkage removes time unavailable for the target work. Utilization describes how much available capacity is used. Define both denominators before combining figures.
Can I use this for a mixed full-time and part-time team?
Yes. First sum the scheduled hours across all groups using the FTE group planner, then enter that total here. Headcount and FTE remain different measures.
Does a negative gap mean I should reduce staff?
No. It means the weekly scenario has more hours than its stated demand. Peak workload, required skills, leave coverage and service requirements may still justify that capacity.