Coaching Works: The Impressive ROI of Executive Coaching and Leadership Development

In sports, the best of the best always have coaches, and the presence and value of coaches–regardless of the talent or skill of the athlete–is taken for granted. No matter how great you are on your own, effective coaching from a qualified coach can improve your performance exponentially. The same goes for the business world, and that idea has become accepted and adopted more and more. 

Of course different organizations have different approaches when it comes to leadership development training for leaders. Some are already utilizing executive coaches, while others plan to offer coaching services to their leaders in the near future. Largely, the need for leadership development, succession planning, and management performance are some things fueling executive coaching.

According to Manchester, Inc., around 6 out of 10 companies offer to coach their leaders. Another study from Hay Group reveals that about 25 to 40% of Fortune 500 companies utilize executive coaches.

Why is leadership coaching important?

Coaching helps leaders grow as professionals and contribute to the success of the organization. That is why we are witnessing an increase in executive coaching as organizations continue to realize executive coaches are a huge addition to their growth.  The 4 key benefits of executive coaching include:

  • New insight: coaches help leaders gain new outlooks on their day-to-day work. By working closely with leaders and better understanding the nuances of their positions, coaches can offer an outside perspective which can help leaders discover new insights, approach situations in different ways and uncover some of their blind spots.
  • Empowerment: effective leaders equip their employees with the tools and resources necessary to be most effective in their roles. But leaders also need to be armed with the tools, resources and sometimes guidance to be most effective in their roles. That is where coaches come in: to empower leaders, so they can empower others.
  • Enhanced performance: coaching creates a safe and secure space for leaders to share, listen, learn and then execute techniques personalized to their opportunities for growth. 50% of employees believe their leaders’ performance can be improved if their direct management skills are enhanced. And about 6 in 10 believe their leaders could gain from training on how to manage people better.
  • Improved communication: how often have you heard that leaders in organizations need to do a better job of communicating? It is one of the most common complaints that we hear. Your ability to effectively communicate is a direct reflection of your leadership style. Coaching allows leaders to learn how to communicate with a broad range of stakeholders from varying backgrounds. Whether it is better connecting with the Gen Z employees on your team, or speaking more persuasively in the Boardroom, leaders can almost always benefit from a heightened focus on their communication style. In fact, 41% of workers believe their immediate managers could gain from additional training in communication skills. 

Of course, these benefits are not gained without a financial commitment. But how much should you spend, and is it even worth an investment? The stats below will answer any questions you have regarding investing in executive coaching.

What does executive coaching cost?

Price ranges for Executive coaches can range anywhere from $150 to more than $500 an hour in some cases. The intensity and frequency of the coaching program, the experience and credentials of the coach, and your industry are some factors that determine the cost of executive coaching.

The good news is you don’t have to pay exorbitant fees for your leaders to be trained. What is most important is researching various Executive coaches, having options to choose from, and making sure the executive coach you select is the right fit for the leader. For coaching to be most effective, the client needs to be open to coaching in the first place, and they need to trust and respect their executive coach. 

The return on investment of executive coaching

Various studies have shown investing in executive coaching is worth it and does pay off. These findings show there is a gain in investing in executive coaching.

  • Companies receive an average return of $7.90 for every $1 devoted to executive coaching (MetrixGlobal LLC).
  • MetrixGlobal also reported a 529% ROI and numerous intangible benefits to the business after studying executive coaching in a Fortune 500 firm.
  • Executive coaching provides an average ROI of nearly 6 times the coaching cost (Manchester Inc.).
  • Coaching combined with training boosts productivity by an average of 86% compared to 22% with training alone (Personnel Management Association report).
  • A study on executive coaching’s effect revealed an average ROI of 5.7 times the initial investment or a return of over $100,000. (Manchester Inc. study).

What all this means

The above stats help demonstrate the efficacy of executive coaching and that it’s a good return on your investment. In addition, executive coaching fosters better social skills, improved leadership skills, and increased productivity. It goes without saying, that leaders today have more responsibility, stress, and complex issues on their plates than ever before. Leaders need help too, but they often don’t have anyone to turn to. Many don’t want to confide in their manager for fear of appearing weak or incompetent, and they don’t have the option of talking to their direct reports about certain matters. I have heard from so many Directors and C-Suite executives who tell me how lonely it can be at the top, especially when you don’t have a trusted advisor, confidant to talk to, and someone to help you navigate uncharted waters with. 

So, if you’re questioning whether getting an executive coach is a good idea, I hope this information helped demonstrate both the benefits and the ROI of coaching. If you’d like to learn more about executive coaching and specifically how it could help you or your team in particular, let’s talk!


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