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The ROI of Coaching

More than an investment.

I am often asked by my clients if there are credible studies on the Return on Investment (ROI) of coaching. In fact, there is a wealth of research demonstrating not only the financial benefits of coaching but also the significant advantages for leaders and organizations. Here, I would like to present a selection of the most relevant studies and their findings.

 

The ROI ranges between 221% to 700% for executive coaching

“A broad range of ROI figures for coaching has been reported. These include estimates of 221% (Phillips, 2007), 545% (McGovern et al., 2001) and788% (Kampa-Kokesch & Anderson, 2001), with figures of between 500% and700% commonly reported as being ‘the’ ROI for executive coaching (Anderson,2008).” 

Source: Grant, A. M. (2012) ‘ROI is a poor measure of coaching success: towards a more holistic approach using a well-being and engagement framework’, Coaching: An International Journal of Theory, Research and Practice, 5(2), pp. 74–85. 

https://doi.org/10.1080/17521882.2012.672438 

 

ROI seven times their initial investment

A comprehensive study by the International Coaching Federation (ICF), conducted by PricewaterhouseCoopers and the Association Resource Centre Inc., shows that companies integrating coaching into their leadership development achieve an average ROI seven times their initial investment. This finding highlights the significant value that professional coaching provides. 

Source: ICF Global Coaching Client Study, 2009 

https://researchportal.coachingfederation.org/Document/Pdf/abstract_190 

 

ROI 5.7 times their initial investment for leadership development

In a study of senior executives at Fortune 1000 companies who received coaching in the context of leadership development, the ROI was nearly 5.7 times their initial investment. This once again confirms the substantial value coaching brings to leadership development. 

Source: Maximizing the Impact of Executive Coaching: Behavioral Change, Organizational Outcomes, and Return on Investment, The Manchester Review, 2001, Volume 6, Number 1, By Joy McGovern, Ph.D., Michael Lindemann, Ph.D., Monica Vergara, M.A., Stacey Murphy, Linda Barker, M.A., & Rodney Warrenfeltz, Ph.D. 

 

ROI between 5.2 and 7.8 for coaching

Employees at Nortel Networks reported that their company initially achieved a 5.2 ROI through a coaching program. After further evaluation, the ROI was even adjusted upward to 7.8, illustrating how the financial and non-financial benefits of coaching often become apparent only after thorough analysis. 

Source: Coaching the Coaches, Psychology Today, 2004 

https://www.psychologytoday.com/intl/articles/200211/coaching-the-coaches 

 

Impressive ROI of 529% and 788% for executive coaching

A Fortune 500 company partnered with Metrix Global LLC to assess the value of an executive coaching program. The result: an impressive ROI of 529%, meaning $5 returned for every $1 spent. When factoring in improved employee retention, the ROI rose to nearly eightfold, totaling 788%. These results underscore the substantial value of executive coaching. 

Source: Executive Briefing: Case Study on the Return on Investment of Executive Coaching. Metrix Global, LLC. Merrill C. Anderson, PhD, 2001 

https://www.gvasuccess.com/articles/ExetutiveBriefing.pdf 

 

Productivity increase by 88%

Coaching not only contributes to financial success but also has a clear impact on personal productivity and stress management for executives. A study published in Sage Journals in 1997 shows that leaders who received coaching in addition to training experienced an impressive 88% productivity increase—compared to 22.4% for those who only attended training. 

Source: Olivero, G., Bane, K. D., & Kopelman, R. E. (1997). Executive Coaching as a Transfer of Training Tool: Effects on Productivity in a Public Agency. Public Personnel Management, 26(4), 461-469. 

https://doi.org/10.1177/009102609702600403 

 

Competitive advantage through employee development

Additionally, a Harvard Business Review analysis shows that stock portfolios of companies that invest heavily in employee development outperformed the S&P 500 by 17 to 35% in 2003. This highlights the strategic competitive advantage that coaching can provide. 

Source: ‘How's Your Return on People?’, Harvard Business Review, 2004, Laurie Bassi and Daniel McMurrer 

https://hbr.org/2004/03/hows-your-return-on-people 

 

Conclusion: Coaching as a Success Factor 

The presented studies and figures show that the ROI of coaching extends far beyond financial returns. Coaching ROI is not only reflected in numbers, but also in significant qualitative improvements experienced by leaders and companies. Organizations that invest in developing their leaders not only lay a solid foundation for long-term success but also foster a culture of continuous improvement and growth. 

Posted by Titus Lindl