DEFINITION of Man-Year
A man-year, or person-year, is a unit of measurement for amount of work done by an individual throughout the entire year, expressed in number of hours. The man-year takes the amount of hours worked by an individual during the week and multiplies it by 52.
BREAKING DOWN Man-Year
The man-year calculated may be different for various industries or organizations depending on the average number of hours worked each week, the number of weeks worked per year, and deductions, if any, for official holidays. The U.S. Postal Service calculates a man-year on a straightforward basis: 40 hours per week x 52 weeks, or 2,080 hours. The Office of Management and Budget (OMB) of the executive branch sets 1,776 hours as a person-year, allowing for holiday time.
Calculating the Man-Year
There are two main reasons why an organization may calculate the man-year applicable to its employees. For one, that organization may use the man-year along with sales or cost figures as a performance metric. For example, a company may calculate a sales per man-year metric and compare it to values from previous years. The second reason a company would calculate the man-year would be for budgetary reasons. Two examples for this case: First, a corporation may calculate the total man-years for various offices that it operates and allocate budgets according to office size. Second, to carry out cost comparisons for a particular job or task, an organization or firm can estimate the number of work hours required and divide this number by a man-year to determine the number of full-time equivalent (FTE) positions needed. Contractors bidding for the job would submit their FTE estimates, and these estimates would be considered for the awarding of the contract.