The employee headcount at a company seems like it should be a straightforward metric. It isn’t.
As business reporters, we often use employee counts to gauge a company’s growth, size and priorities. For small, private companies especially, employee counts can be one of the most accessible and telling numbers available. But here’s the catch: Not all “employees” are created equal, and founders have plenty of incentives to inflate those numbers.
This isn’t necessarily about deception. Many founders genuinely believe their extended network of contractors, part-timers, and interns are part of their “team.” And in many cases, that broader team plays a significant role in their business. But as reporters, we need to dig deeper. If we take every headcount claim at face value, we risk misunderstanding a company’s true scale or overstating its growth.
So how do we approach employee counts with both curiosity and skepticism? Here are a few tips:
1. Clarify Full-Time Employees
When a founder shares their headcount, your next question should be: How many of those are full-time employees? This number matters because full-time employees (often salaried, W2 workers) represent a more permanent and sustained commitment from the company. Contractors and part-timers can be scaled up or down quickly, but full-timers are typically a better indicator of a company’s core operations.
For example, at my own company, Technical.ly, we have 19 full-time employees. However, if you include part-timers and contractors, that number rises to 24 people who regularly get a paycheck from us. In some contexts, we might call that a “team of 24,” but I’d expect a diligent reporter to push me on how many of those are full-time staff.
2. Consider Full-Time Equivalent (FTE)
In some industries, particularly those with lots of part-time or seasonal workers, it’s worth asking for the full-time equivalent (FTE) count. This metric translates all the hours worked by part-timers into the equivalent of 40-hour workweeks. For instance, two part-time workers clocking 20 hours a week each would count as one FTE.
FTE is a useful standard because it provides a clearer sense of the company’s overall workforce capacity. Many government and economic reports rely on FTE figures, and they can help normalize comparisons across companies with different staffing models.
3. Be Wary of Inflated Numbers
It’s not uncommon for founders to include anyone remotely connected to the company in their employee count—freelancers, one-off contractors, or even unpaid interns. This can make a company seem much larger than it actually is. While it’s fine to include those numbers in certain contexts, you should always distinguish between core staff and auxiliary contributors.
For example, a founder might proudly claim they have a “team of 400,” but if 380 of those are one-time freelancers, that paints a very different picture than a company with 400 full-time employees.
4. Think About the Narrative
Ultimately, employee counts are a storytelling tool. The number a company shares—and the one you choose to include in your reporting—should match the narrative you’re telling. Is the focus on a company’s growth trajectory? Highlight full-time employees to underscore sustained investment. Covering a gig-based startup? Mention contractors to illustrate its flexible model.
TL;DR: Always Ask the Follow-Up
Employee counts are a valuable metric for understanding a company’s size and priorities, but they require context. Always follow up to clarify:
- How many employees are full-time?
- What is the full-time equivalent (FTE) count?
- Who is included in the broader “team” number?
By asking these questions, you’ll ensure your reporting accurately reflects the reality behind the numbers—and avoid falling for the illusion of scale that an inflated headcount can create.
