I learned this term from a chart presented at a team meeting. It contained a column labelled BIS. When asked what those letters meant, the team manager explained that it's an abbreviation for butts in seats. Everybody in the room instantly understood. It is the number of actual human beings sitting at desks doing work.

When doing project planning, you sometimes get carried away with the imaginary people who would be working on your project someday, treating them as if they were real people: coming up with features for these imaginary people to work on, projecting how many bugs these imaginary people will fix, looking forward to the funny stories these imaginary people will tell when you go out for a beer after work.

This is all ridiculous, of course, because imaginary people don't write code or fix bugs or buy you a pint of beer after work.

You need to base your calculations on actual human beings and not imaginary people. That's why you work with butts in seats and not empty seats. Sure, you have two open positions on your team, and you have every intention of hiring people to fill them over the next few months, but until there are butts in those seats, those people are still imaginary, and they're not doing any work, so you shouldn't count them in your charts.