Why coaching? For ICF coaches, managers, and employees who have experienced coaching, the answer is simple: it pays off. However, for others who are not in the know, the return on investment (ROI) of coaching may be less obvious. The costs may seem high, the results too broad, and the focus away from other work too great. For some, the benefits of coaching are not always clear.
How Coaching Enhances Organizational Performance: Key ROI Statistics
For organizations that have hired coaches, the numbers and benefits are readily apparent. A report from management consulting and investment banking firm FMI found that 87% of survey respondents agreed that executive coaching has a high return on investment (ROI). More positive findings:
- There is a strong correlation between coaching and increased employee engagement, with 72% of respondents in the 2023 ICF HCI Defining New Coaching Cultures report acknowledging this relationship.
- From the ICF report, it’s also evident that employees at every level appreciate coaching, with high approval from both senior executives (78%) and employees (73%).I
- A global survey by PriceWaterhouseCoopers and the Association Resource Center report an average ROI of seven times the cost of employing a coach.
Creating a Coaching Culture
Coaching has benefits for everyone involved — individuals and organizations alike. Organizations that adopt coaching and provide staff training can experience higher employee engagement and retention, better growth opportunities, and improved financial performance. According to the ICF Human Capital Institute Defining New Coaching Cultures study, there is a strong correlation between coaching and increased employee engagement.
A 2022 ICF International Prism Award winner — Intel’s coaching program drastically transformed outcomes across all business units, from finance to manufacturing. According to company reports, the coaching program at Intel now contributes about $1 billion USD per year in operating margin. Coaching also has changed behaviors among teams for the better, behaviors that enabled the new revenue gains. These behaviors include fostering a feeling of personal investment in the company, which helps keep employees around longer, and helping team members develop their leadership skills to better “teach” their direct reports. Today, Intel’s program has evolved into a fully adopted coaching culture.
Empowering for Success
However, the ROI of coaching isn’t determined exclusively by financial measures. Performance metrics can be even more important and telling. While fully implementing a coaching culture in an organization may take considerable time, the ROI of coaching for individuals can be almost immediate. The 2023 Defining New Coaching Cultures report shows strong agreement that coaching leads to enhanced leadership development and increased employee engagement and commitment.
This can be especially powerful when there are age gaps among employees, with each generation having its own distinct perspectives on work. Gen-Z, born between 1997 and 2012, is quickly becoming a significant portion of the workforce. They serve as a useful example.
A study by The Workforce Institute at Kronos Inc. said that Gen-Zers are not confident in their abilities to do the job, including resolving work conflicts, being managed by another person, and networking. Gen-Z employees need to build trust and confidence while on the job. Though Baby Boomers prefer a traditional, hierarchical workplace and value authority on the job, Gen-Zers don’t want a boss; they want a manager—someone to look up to and learn from. Coaching the leader to increase those strengths results in greater employee retention at all levels, a powerful force multiplier of the ROI.
Recent coach training at AstraZeneca reinforced this notion of trust. Coaching transformed how company leaders speak to team members, shaping the specific language used, encouraging employee engagement, and accelerating leadership development. As such, 45% of participants had a more positive mindset regarding a sense of trust and safety within their teams. Employees with greater trust are more likely to share opinions and engage in healthy discussions without fear of negative consequences. Coaching helps create this productive work environment where team members feel supported, respected, and free to express their emotions and concerns.
Measuring the Impact
The ROI of coach training should be measured both qualitatively and quantitatively. Did the clients meet their expectations and goals — of the individual, team, and organization? What hard numbers indicate success and improvement? Review data on retention and revenue after coaching to conduct this analysis, and then use employee and leader surveys to gauge engagement and behavioral changes that might have occurred. In helping your clients measure and calculate their own ROI, the case for coaching can be even better received. Organizations can plan for the future, knowing what they are working towards, what leaders and team members can expect, and how a coaching culture can be applied.
The coaching world is growing exponentially, and ROI is keeping up. Know what to look for and how to measure, and you won’t be disappointed.
