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Measuring ROI in coaching

Measuring ROI In Coaching – a guide for coaches and those buying coach services.

"Coaching may be the wave that carries the future of corporate training and development. But if that wave is ever to crest, corporations must be able to determine a financial return on their investment. Only if early adopters can truly demonstrate an ROI in figures will coaching wash over corporate culture and change its landscape."

HR Today

The challenge has been laid down to coaches to hold themselves accountable to their clients to demonstrate the value they bring.  We know coaching works, but it’s also expensive.  This article sets out how the coach can build evaluation into their work to ensure ROI can be clearly shown.

Research

A number of professors have grappled with ROI.   As far back as 2001 the Manchester Consultancy surveyed 100 ‘Fortune 100’ executives to measure the ROI on their coaching programme.  Their findings were that for each £100 spent on coaching, the organisation could expect to see £500 increase in turnover.  However more recently Personnel Today conducted a survey showing that 67% of organizations conduct no evaluation of coaching activity.  Perhaps that’s because they are not sure how to go about it.  However if coaching is going to be as big as we expect, it will have to be accountable to those who are paying for it.

How should it be done?

The responsibility to measure the ROI rests with the coach, the coachee and the organisation.  In the first instance, objectives need to be clearly set which are agreed between the coach, coachee and organisation sponsor.  Where the coaching is focused on behavioural change, it’s worth considering what financial benefits would be achieved if these behavioural changes were achieved.  For example a leader who wishes to develop a more collaborative leadership style may see a drop in staff turnover if they are successful in changing their style.  This would have financial benefits in terms of reduced recruitment costs.    Recently a GCA client showed an amazing ROI.   As a result of the coaching he was able to show how his client fees had gone from an expected £1M to £5M.  He attributed this to the behavioural changes he had made with his clients.
It is also important that the coaching programme flows from the objectives and it’s worth regularly reviewing the original objectives to check that the coaching is on track, or if necessary to amend them where performance shifts have already been achieved.

A number of tools are available to measure ROI.  360 degree analyses at the beginning and the end of the coaching can clearly show where behavioural shifts have been made.  Employee surveys can also measure ROI at an organizational level.  A coaching colleague personally surveys her coachee’s colleagues by telephone before and after the coaching to assess the overall impact and ROI which she feeds back to the key stakeholder.

Conclusions

  • Set clear measurable goals that are agreed by all parties
  • Monitor progress during the programme
  • Build evaluation methods into the programme such as 360 analysis
  • Be accountable for your coaching