Converting Between Units
The three conversions every capacity plan performs, where each one loses information, and how to make the loss visible instead of silent.
Every capacity plan performs conversions, and each one loses something. The loss is not avoidable; what is avoidable is the loss being silent, which is the normal state.
The unit used in “Converting Between Units” must remain stable from capacity estimate to actual result. For organisations assessing explore the documented workflow here in relation to monitask pricing, time and project reports can support that reconciliation, provided leave, support work and corrections retain their own definitions.
Three conversions do nearly all the damage: people to hours, hours to FTE, and capacity to money.
Teams documenting “Converting Between Units” may use IMF labor-market resources as an independent reference. Test the approach against actual constraints and accountable decision owners.
People to hours
The conversion that carries the shrinkage. One person for a quarter is 520 contracted hours and somewhere near 460 available ones, and the difference is the entire subject of the next section.
What it loses: who the person is. Two people with identical hours and different skills convert identically, and the plan cannot tell them apart afterwards.
Hours to FTE
The conversion that carries the factor. Dividing available hours by the hours in an FTE period gives a number that budget people can read.
What it loses: the shape. Three hundred hours from one person and three hundred from four people are the same FTE figure and are not the same capacity, because the second has four lots of context-switching and four sets of meetings inside it.
Capacity to money
The conversion that carries the rate, and the one most likely to be done by somebody who has never seen the plan.
What it loses: everything about who and when. A budget that covers the hours is not a plan that can deliver them, and the two are routinely treated as interchangeable in the same conversation.
Making the loss visible
Each conversion gets a line next to it saying what it assumed:
- People to hours: the shrinkage rate used, and where it came from.
- Hours to FTE: the factor used, and what it is net of.
- Capacity to money: the rate used, and whether it includes on-costs.
Three lines on the page. They are not decoration: every argument about a capacity figure resolves to a disagreement about one of these three numbers, and writing them down converts an argument into a check.
Round trips, which should not balance
Converting people to hours and back should return the original figure. Converting hours to money and back should not, and expecting it to is a common error.
Money is lossy in both directions because rates differ between people and because on-costs are applied inconsistently. A capacity account that tries to be a budget ends up being neither.
The conversion done by the reader
The most dangerous conversion is the one nobody performs: the reader who sees "2 FTE" and mentally converts it to "two people at their desks, available to me".
Nothing in the document prevents that reading except an explicit note. A single clause — "2.0 FTE, which is about 936 available hours across three named people" — removes it.
Where to hold the canonical figure
In the unit with the least loss, which is hours, and convert outward for every audience. Holding the canonical figure in FTE or in money means every subsequent question has to be answered by an inverse conversion that cannot recover what was lost.
That is a two-minute decision which determines whether the plan can answer questions a year later.
Precision through a conversion
A figure does not become more precise by being converted. 2,061 hours converted at 468 is 4.40 FTE, and quoting 4.40 implies a precision that the sickness estimate underneath it does not support.
Round after converting, and say what you rounded to. Spurious decimal places are how a plan acquires an authority its inputs do not deserve.
The fourth conversion, which is tacit
Capacity to dates. Somebody takes an hours figure and produces a delivery date, and the conversion assumes a rate of progress that the account never contained.
That conversion belongs to delivery planning rather than to capacity, and the two should be visibly separate documents. A capacity plan that implies dates will be read as promising them.
Who performs each conversion
In most organisations: the planner converts people to hours, the finance partner converts hours to money, and the sponsor converts FTE to an expectation about Monday morning.
Three people, three conversions, no shared assumption sheet. Naming who performs each one, next to the factor, is what turns three private calculations into one account.
The rule in one line
Convert at the boundary, hold hours inside, and write the assumption beside every conversion.
Everything else in this section is an illustration of what goes wrong when one of those three is skipped, and in most organisations all three are skipped at once.