What’s the real ROI of Executive Coaching?

Often we get questions from senior leaders in organizations like…

“I know coaching is good for the individual being coached, but what’s in it for our company?“

or..

“I hear of other companies paying for their team to be coached – is that just an executive perk?”

But in fact, executive coaching not only helps the person being coached, it brings enormous benefit to the company too.

Why Companies Provide Coaching

A study by Hecht Harrison (a global recruiting company) found the top five reasons why companies provide coaching:

  • For leadership development—70%
  • For skill development or style differences—64%
  • To retain top talent—40%
  • As part of management succession planning—34%
  • To ensure success after promotion or with a new hire—30%

“How Is Coaching Used in Your Organization?”

– Lee Hecht Harrison

The Financial and Intangible Value of Coaching

A well-known study in the Manchester Review surveyed 100 executives in Fortune 1000 companies, who had participated in coaching.

The execs were:

  • 30-60 years old
  • 34 women, 66 men
  • 50% of them holding VP or higher jobs
  • 28% earning in the low 6 figures
  • 19% in the mid six figures

They also interviewed, where possible, the executives’ boss and the HR Director.

The Manchester Review study found the average return on investment (ROI) from coaching was nearly 5.7 times the cost of coaching.  Execs in the study confirmed tangible and intangible benefits to their companies, including:

Tangible Benefits

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Intangible Benefits

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Since the Manchester study, numerous organizations have quantified the ROI that organizations have found through coaching. An ICF Study found it was, on average, 7x the price of the coaching.

A Harvard Business Review study of companies that spent aggressively on employee development (How’s Your Return on People?) found that each outperformed the S&P 500 by 17-35%.

What Sets Coaching Apart?

Of course, by looking at ROI we may have a tendency to overlook some intangible benefits to the company that often are crucial.  

  • Leadership can be lonely.  A trusted advisor outside is a big help when times are tough — ensuring a leader had a thinking partner and trusted confidante when they are leading others through difficult times can bring almost immeasurable benefit.
  • Coaches typically work on the leader’s most pressing challenges – one of the reasons ROI is so much higher with coaching than most training and development is that it is customized.
  • Focus.  A great coach cuts through the noise of 1000 emails and competing priorities to help the executive find the 2-3 levers that will have the most impact on results – theirs and the company’s.

How Might You and Your Company Leverage Coaching?

Some of the ways we help are:

  1. Coaching to assist organizations with key business goals. Our coaches work with your leaders to identify and create clarity around key business goals and establish effective management strategies to ensure goals are met.
  2. Coaching to bolster creativity. Our coaches support your leaders in confidently pursuing new ideas and alternative solutions with greater resilience and resourcefulness. Our coaches encourage fresh perspectives and provide inspiration through the questions they ask during sessions and the actionable goals they co-create with your leaders.
  3. Coaching to manage the change or growth. Professional coaching is an important tool for managing change—including growth. Our coaches help your leaders assess current needs, opportunities, and challenges, all while maximizing the potential they already possess.
  4. Coaching to boost productivity and effectiveness. This is especially important if you have employees taking on new or leadership level roles.  Our internationally certified coaches are trained to work with clients to inspire them to their personal and professional potential – increasing their productivity, effectiveness and overall success. According to the ICF Global Coaching Client Study 70 percent of clients reported a positive improvement in work performance.
  5. Coaching to develop communication skills. The ICF Global Coaching Client Study revealed that 72 percent of those being coached noticed an improvement in communication skills. We constantly see clients walk away with fresh perspectives on personal challenges and opportunities, enhanced thinking and decision-making skills, enhanced interpersonal effectiveness, and increased confidence in carrying out their work and life roles.
  6. Coaching to help your organization attract and retain talented employees. If you have trouble finding great leaders (or getting them to stick around), your organization likely needs to commit to investing in employee development. Coaching is an ideal way to develop your team and show your leaders you value their development.
  7. Coaching to bring work-life balance into the lives of your employees. An employee experiencing the benefits of a balanced life is a happier employee. And a happier employee is a more productive employee. It’s really that simple.  Our coaches work with leaders to discover, clarify, and align with what they hope to achieve, including a stable work-life balance. According to the ICF Global Coaching Client Study 67 percent of clients saw an improvement in balancing work and life.
  8. Coaching to help your leaders thrive. Virtually all companies who hire a coach are satisfied with the outcomes. The ICF Global Coaching Client Study found that 99 percent of coaching clients were “somewhat” or “very satisfied” with their overall coaching experience. At Padraig we haven’t yet conducted a full study but we have seen that 96 percent of our clients to date have renewed with us and/or referred their colleagues and associates to us.  We take that, and their testimonials, as a good sign that we’re helping people.
  9. Coaching to help your company flourish despite uncertain economic times. Coaching is a very powerful tool in the face of uncertainty—organizations of all types and sizes have experienced the value professional coaching brings including: increased business performance, improved product quality, higher employee retention and morale, greater employee commitment, leadership development, conflict reduction, teams building skills and more.
  10. Coaching to restore self-confidence to organizations. Organizations that have experienced workforce reductions through downsizing, restructuring, or a merger place extremely high expectations on the remaining workforce. Restoring self-confidence to “survivors” is critical to meet organizational demands. The ICF Global Coaching Client Study shows 80 percent of those being coaching saw an improvement in their self-confidence.

We are accredited members of the International Coach Federation.  If you’re hiring a coach, please make sure they have accreditation with the ICF !

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