ROI of Executive Coaching

For corporate buyers, such as HR departments, one of the most difficult aspects of Executive Coaching is defining the benefits an organisation can expect to gain from the coaching. It is easy to talk about ROI, but harder to quantify. The results of a 2001 American study of 100 executives may help.

The executives who received the coaching were mostly from Fortune 1000 companies which experienced improvements in productivity, quality, organisational strength, customer service, and shareholder value. They received fewer customer complaints, and were more likely to retain those executives who had been coached. In addition, a company’s investment in providing coaching to its executives realised an average ROI of almost six times the cost of the coaching.

Who were the coachees? ·

  • Half of the executives in the study held positions of vice president or higher ·
  • 57% of Coachees were ages 40 to 49 ·
  • 33% earned $200,000 or more p.a.

What kind of coaching did they receive? The coaching programmes that executives participated in were a mix of both

  • Change-oriented coaching aimed at changing certain behaviours or skills and ·
  • Growth-oriented coaching aimed at sharpening performance.

The coaching programmes typically lasted from six months to one year.

The main results of the study:

For a typical executive coaching assignment, the coaching programmes delivered an average ROI of 5.7 times the initial investment (or more than $100,000), according to executives who estimated the monetary value of the results achieved through coaching.

Among the benefits to companies whose executives participated in the coaching were improvements in:

  • Productivity (reported by 53% of executives)
  • Quality (48%)
  • Organisational strength (48%)
  • Customer service (39%)
  • Reducing customer complaints (34%)
  • Retaining executives who received coaching (32%)
  • Cost reductions (23%)
  • Bottom-line profitability (22%)

 Among the benefits to executives who received coaching were improved:

  • Working relationships with direct reports (reported by 77% of executives)
  • Working relationships with line managers (71%)
  • Teamwork (67%)
  • Working relationships with peers (63%)
  • Job satisfaction (61%)
  • Conflict reduction (52%)
  • Organisational commitment (44%)
  • Working relationships with clients (37%)