Many business establishments and corporate organizations these days claim that they give training to their staff and top executives. However, the truth is they cannot accurately prove the return on investment (ROI) of their training. On the flip side, due to the high competition, business managers and entrepreneurs are being forced to ensure every penny they spend in their training or coaching programs come back to them and positively impacts the business.
Therefore, more HR, learning and leaders seek effective processes which help them to determine the ROI. In the early years of coaching, the curriculum and approach was shaped on the idea “one size fits all.” It paid no attention to the individual complexities and showed little to no objective quantifiable results. Truly, the real results offered by traditional coaching were either trivial or unquantifiable. Also, the ROI of these costly programs could not be measured. Still it remains a concern for many business owners.
But the good news is, as the environment of business changes and the expectations of the business owners become more challenging. Many certified professional coaches have come up leading with advanced coaching processes. So, it becomes possible to measure the possible results.
What do studies say?
- As per studies, coaching top executives at large companies yields 5-7x the company’s initial investment. To be more precise, in a survey commissioned by ICF and conducted by PricewaterhouseCoopers, it was found that companies that made use of professional coaching for business reasons have noticed an average return on their investment of 7x of their initial investment. It is an astonishing figure.
- Another study, Maximizing the Impact of Executive Coaching, The Manchester Review, Volume 6, Number 1, Joy McGovern, et.al., 2001, that assessed the ROI at Fortune 1000 companies for developmental coaching for senior-level executives stated the average return was nearly 5.7x the initial investment. Metrix Global, LLC was hired by a Fortune 500 company to calculate the ROI for a leadership coaching program. The results pointed out that coaching produced a 529% ROI and also fetched other immeasurable benefits to the business, for instance, employee retention.
- As per the calculations prepared by a professor of clinical education at Drake University, Merrill C. Anderson, at Nortel Networks, employees estimated that their coaching programs earned the company a 5.2x return on investment. It also brought major intangible benefits to the business. It included the financial benefits from employee retention that boosted the returns to 7.8x of the initial investment. You can find the full case study at Coaching the Coaches, Psychology Today, 2004, and Case Study on the Return on Investment of Executive Coaching, Merrill C. Anderson, Ph.D., 2001.
- In a recent article on Forbes about executive coaching, it was reported that corporate America is spending over $1 billion yearly on executive coaching. This rise in coaching is a result of the heightened focus on rising high potential leaders instead of a remedial effort to help to derail employees. And even the leaders themselves say it is working.
- In a study conducted by MetrixGlobal LLC, pointed out that companies including Booz Allen Hamilton made an average return of $7.90 for every $1 invested in executive coaching.
- In an internal report given by the Personnel Management Association, it was revealed that when you combine training with coaching, individuals increase their productivity by an average of 86% compared to 22% with training alone.
It is crystal clear why executives and entrepreneurs worldwide put great trust in coaching because of the ROI it brings to the company. Apart from that, an article published in the Harvard Business Review 2009 issue points out the main reasons why business owners hire certified professional coaches. It says 48% of entrepreneurs hire coaches to develop high potentials or to make an easy transition.
Given that hiring a certified professional coach comes with an average ROI of 500-700%, you can safely bet that the demand for business coaches will only heighten. Coaches can aid business entrepreneurs to develop as leaders in order to successfully lead their company in a highly competitive business environment.
A Proven Approach
Today, coaching is seen as an effective organizational development tool that can be set up as a stand-alone or as part of an intensive change program to accelerate the impact of a growth initiative. Its flexibility as a tool and its proven ROI make it an essential approach in the design of culture change activities which benefit both the staff and the organization at large.
Coaching is greatly beneficial to organizations, leadership and individuals alike. Engaging coaches and teaching leaders how to coach team members comes with several advantages in employee engagement, contentment, and productivity while increasing the profitability and market growth. It is the right time for you to develop your coaching potential and take your business and organization to the next level.
If you are interested to find out more about our Accredited, Professional Coach Training or experience a FREE 30min Video Coaching Session set up an appointment here with Tony – https://calendly.com/tonydavidvernon or Jennifer here – https://calendly.com/jenniferhelene or call our US Head Office on TEL. (415) 408 8549