The Return on Investment for Business Coaching

Coaching is a relatively new industry that started in the United States in the 1980s and has spread world‐wide. It has become very popular because it works. A 2001 Manchester study of 100 executives from Fortune1000 companies found that the average ROI (return on investment) was 5.7 times the initial investment in a typical executive coaching assignment. The study found the benefits to companies that provided coaching to executives were improvements in:

• Productivity (reported by 53% of executives)
• Quality (48%)
• Organizational strength (48%)
• Customer service (39%)
• Reducing customer complaints (34%)
• Retaining executives who received coaching (32%)
• Cost reductions (23%)
• Bottom-line profitability (22%)
• Working relationships with direct reports (reported by 77% of executives)
• Working relationships with immediate supervisors (71%)
• Teamwork (67%)
• Working relationships with peers (63%)
• Job satisfaction (61%)
• Conflict reduction (52%)
• Organizational commitment (44%)
• Working relationships with clients (37%)

According to an International Coach Federation survey, clients typically seek help with time management (81%); career guidance (74%) and business advice (74%). The benefits extend to self-awareness (68%); smarter goal setting (62%); a more balanced life (62%); reduced stress levels (57%); and more self-confidence (52%).

Other studies reported:
• MetrixGlobal, LLC a Fortune 500 telecommunications firm reported a ROI of 529% based on survey of 43 leadership development participants. They also found the financial benefits from increased retention raised the overall ROI to 788%.

• The Xerox Corporation showed that in the absence of follow-up coaching 87% of the skills change brought about by the training program was lost. However good skills' training is in the classroom, most of its effectiveness is lost without follow-up coaching. For example: Most sales people try out the new skills for a few calls, find that they feel awkward and the new method isn't bringing instant results, so they go back to their old ways.

• "Coaching is the only cost-effective way to reinforce new behaviors and skills until a learner is through the dangerous results dip. Once through the dip, when the new skills bring results, they will become self-reinforcing." — Training and Development Journal.