Finding Your Unicorn Employee With NOW CFO
Unicorns and business aren’t necessarily two topics you’d think go together. But it turns out they do, and for good reason.
As we know, a unicorn business is a term used to describe a privately held start-up worth over $1 billion. A unicorn employee is known as a term that sums up a special breed of person in the workplace. While not many entrepreneurs have a billion dollars lying around to buy themselves a unicorn business, every business should be on the lookout for a unicorn employee.
Fortunately, because NOW CFO is a financial consultant firm, we have access to hundreds of unicorn employees across the nation who each have their own set of specialized skills and have worked with companies of all sizes and industries.
Characteristics of a Unicorn Employee
Unicorn employees are the passionate and capable people who can power through challenges and lead their organizations towards innovation and success. Their qualities tend to set them apart from other, standard employees, including the fact that they are nearly always ahead of time with their abilities and skills.
Nowadays, every organization needs a driven leader who can rally up their teams and provide a supportive, motivational environment for them. Unicorns are excellent hires in this regard. They possess the intellectual brilliance to produce consistent results and the skills and drive to promote productivity among their peers.
Some of the qualities of a unicorn employee include:
- Creativity, passion, and innovation. Unicorn employees are creative and passionate about their work, and about co-creating value for customers, employees, and organizational partners. They are adept at communicating and delivering workable solutions that significantly improve customers’ experiences.
- Early adoption of new technologies. Unicorns are always eager to adopt emerging technologies in a bid to improve their own competency and output. They learn the ropes quickly due to their superior technical skills, experience, and training. For example, NOW CFOs consultants must be well versed in multiple accounting software and systems and constantly stay up to date on these, as well as new accounting processes. They use new technologies to provide motivating and functional environments for their peers and current employees of the company they are consulting, assisting them to develop their own skills and understanding of these tools in the process.
- Humility and honesty. These employees are reliable, honest, and work with the utmost integrity while always adhering to rules and regulations. They value and bring out these characteristics in their team members, which allows them to maintain positive working relationships over time. NOW CFOs consultants work closely with their fellow team members, and clients. It is their responsibility to be honest and always communicate with everyone involved on both ends throughout the project.
- Authentic leadership. Unicorns stand out when it comes to team management because they have clear and realistic understandings of their strengths, weaknesses, and capabilities. They actively listen to the ideas and opinions of their peers and assist them in optimizing their approaches. NOW CFOs consultants consistently step up when needed and are often moving throughout the ranks of the organization by showing robust leadership skills.
Determining the Value of Standard and Exceptional Employees
Considering the intricacies of a business environment, productivity should be defined on a wide range of statistics. However, you can use a general formula to determine the productivity value of a standard employee. High utilization and productivity are important to our consultants at NOW CFO.
The basic formula would look something like this:
Productivity = value of useful outputs / total cost to obtain these outputs
In a more financial sense, one could write the formula as follows:
Productivity = total revenue generated / total cost incurred
Alternatively, you could also calculate productivity like so:
Labor productivity = total output / total input in hours
= $20,000 / 1,000 hours
= $20 per hour of work per employee
Numerous studies have shown that exceptional contributors and unicorn employees contribute up to 10x more to their organizations than their average peers. Some successful corporations, including tech giant Microsoft, believe that number to be as high as 100x.
Calculating Recruitment Costs
The cost of finding the right new hire for your organization can be hefty, but NOW CFO can aid in taking some of that cost and stress off of you. By outsourcing, you can cut labor costs by an average of 42%-51% and increase productivity by 20%. If you’re on the hunt for a unicorn, that price could be even higher, as your search could be longer and more involved.
According to President of Bliss & Associates Inc Bill Bliss, the costs of recruitment include advertising openings, time costs for internal recruiters, and time costs of recruitment assistants who are tasked with reading resumes and performing other related tasks. By outsourcing, you already eliminate half of those costs which include: time costs of the people conducting the interviews, background checks and drug screens, and various other pre-employment assessments and tests are included too.
Statistically, even a low-earning employee can cost a company around $3,500 in direct and indirect turnover costs.
Then there is training.
Once you’ve hired your unicorn, you may need to provide adequate training for them to start producing value for your company. Our consultants are skilled in training and providing use of their own knowledge, augmenting your current staff to feel confident in the new skills provided.
Determining Unicorn Salaries and Benefits
The most obvious cost of any new employee is their salary. This comes with add-ons, especially if you are hiring a valuable unicorn who you will want to entice with adequate benefits. These benefits could range from minor perks like free break room coffee to major perks like dental and medical plans, life insurance, or disability coverage.
Boston Business Journal and senior lecturer at MIT’s Sloan School of Management Joe Hadzima notes that the salary and benefits for an employee today normally totals in the 1.25 to 1.4x base salary range. Essentially, the salary and benefits package for an employee who earns $50,000 a year could actually cost their employer up to $70,000. Luckily, outsourcing your employee will cut those costs by more than 50%, because you are not paying them benefits or an annual salary.
Forecasting Future Value vs Expenditure
The goal of your investments in a unicorn employee is a marked increase in productivity. However, it’s crucial to be aware that it can take time for these costs to pay off and to see returns on your initial investments. A survey of 210 CEOs conducted by Harvard Business School has estimated that a standard mid-level manager may need up to 6 months to reach their break even point.
Essentially, this means that a mid-level manager needs to be on the job for at least 6 months in order for their hiring company to earn back the investment they made on that hire.
There are three main periods on the productivity scale:
- The first month. Once your new hire has completed training, they will usually function at around 25% productivity, although unicorn employees may function at a slightly better rate. This means that the cost of loss productivity is 75% or less of the new hire’s monthly salary at this time.
- The second month. The new employee’s productivity level should increase to 50%, displaying a corresponding cost of 50% of their salary.
- The third month. During this time, most employees will reach a productivity rate of around 75%, with the cost being 25% of their salaries. Unicorn employees may be nearly fully productive by weeks 9 to 12, providing even more value for your initial investment. After the 12-week mark, companies can expect all of their new hires to reach peak productivity.
Hiring a new employee is a big decision that does not fall lightly on any company’s budget. However, taking the time and making a larger investment to hire a unicorn employee could lead to a far better return on this investment within a shorter period of time.
Your company may also enjoy the benefits of a more motivated, productive, and innovative workforce as your team follows your unicorn’s lead. By finding an outsourced employee, you will be able to find someone who is well versed with companies your size, and industry. They will know from years of experience with hundreds of different companies what will work best for you and the company.
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