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ROI of Coaching

Updated: Aug 4, 2023

3 ways to measure benefits &

3 types of benefits we can measure


It's more about sense than dollars. Measuring makes sense, and capturing coaching impact is a fine art not a financial spreadsheet.

Image by Gerd Altmann from Pixabay


Coaching helps us up our game in every life and organizational context. I’ve seen and experienced this first hand. You can read about it in the growing body of both anecdotal stories and substantiated articles, books and academic research. There are myriad reasons and conditions for this—from coach education and experience, to client commitment and accountability, and sponsoring organization support.


In my experience (along with other coaches), with clients, organizational sponsors, most don't ask about or care about ROI in the traditional sense. They care about insights to help get unstuck and provoke new thinking and ideas; they care about change to progress on their goals, and transformation to grow as a person, partner, leader, peer, etc. Measuring value and benefits, in this regard and all others, is about setting and maintaining: clear goal, vision of desired outcome (what does success look like, how will we know you got there?), clarity of what's in the way and what are the inspiring motivations (importance and meaning).


This article:

  • Is written for both those already in the qualitative and transformational realm AND those who may, in fact, also be curious about or looking for the more quantitative evidence of ROI.

  • Looks at return on investment (ROI) and different ways of measuring coaching effectiveness.


ROI is challenging and misses the whole picture

It's natural human curiosity and a fiscally responsible question. Coaches, clients, and organizations, want to know how to capture the benefits of coaching in some kind of quantifiable way that gives us at least a sense of ROI. However, like many experiential products—vacations, massage or therapy, even training—coaching efficacy is just not so cut and dried.


Studies put ROI at between 500 and 800% [1]. Scientific studies and meta-analyses indicate coaching positively impacts individual outcomes [2]. "The existence of such robust empirical evidence has caused the actual expectations of coaching in organizations to expand. The organizational expectations now include psychological well-being, employee relations, engagement, and motivation to change, which go beyond mere strictly performance-related outcomes." [3]


Generally, measuring the benefits of coaching in a defined, calculated, ROI-way is difficult. I’ve yet to see a simple standardized approach to determining coaching ROI that can be used by organizations or coaches (please let me know if you’ve come across one).


"The research suggests that solution-focused cognitive–behavioral (SFCB) coaching can enhance performance, reduce stress, and help build resilience. Thus, SFCB coaching may be a useful methodology for enhancing both performance and well-being while also serving as a preventative mechanism that can reduce the probability of stress-related fatigue and burnout." ~ Anthony Grant, PhD, Consulting Psychology Journal, Practice & Research [4]

So, coaching can have many intangible qualitative outcomes and it is an evolving process shifting during and after the engagement. Also, no individual works in a vacuum and “It is virtually impossible to run a 'blind' scientific test of coaching.” [5]


There is a cautionary note by many experts and academics studying the field. It can be summed up as:

“… financial return on investment (ROI) is an unreliable and insufficient measure of coaching outcomes and… an overemphasis on financial returns can restrict coaches’ and organisations’ awareness of the full range of positive outcomes possible through coaching. Furthermore poorly targeted coaching interventions that myopically focus on maximising financial returns may actually inadvertently increase job-related stress and anxiety. [A] well-being and engagement framework (WBEF)... [is] an example of a potential approach for evaluating the impact of coaching in organisational settings that can give a richer overview of coaching outcomes than financial ROI. Although financial ROI may well be an attractive metric for some managers and organisations it is proposed that frameworks such as the WBEF and goal attainment can provide a far more comprehensive and meaningful metric than financial ROI.” [6]

Performance is inferred in the goal attainment reference above, and is carefully and intentionally included. There are ways to evaluate coaching impact in a more holistic sense, in well-being, engagement and performance. So, if financial return on investment, appealing as a more traditionally tangible metric, is actually an unreliable and insufficient measure of coaching outcomes how can we gain a richer picture of coaching outcomes?


Three Ways to measure benefits


1. Benchmarking

When benchmarking, many coaches and HR professionals employ a custom approach, unique to the organization and effective when done well. There are a number of standard indicators that can be pulled into the mix (see What can be evaluated below).


This works well across organizations, or a sub-group such as departments and teams. Benchmarking can be done before and after (sometimes during) a widespread coaching initiative. It is richest when including self-evaluation and internal evaluation made up of both interviews and surveys, creating a blend of perspectives, and quantitative with qualitative markers. Wellbeing, competency/performance and engagement are key marker categories. Benchmarking can also look at external feedback from customers and partners.


2. 360 Feedback

On an individual level, 360 feedback reviews can serve a similar purpose. The gold standard is a narrative 360, facilitated by the coach and co-designed by the individual and the sponsoring manager. Typically it features collecting feedback on three to four key competencies the client and their manager would like to see grow. As an independent, objective partner, the coach conducts interviews, reviews results with the client and facilitates creation of an action plan.


3. Coaching debrief stories

Being intentional about coaching debriefs can be an illuminating and relatable way to get a sense of benefits. Good stories are powerful—for story tellers and recipients. These can be periodic check-ins and an important component of wrapping up the engagement.


It is important to keep to the essence, simple and brief, capturing perspectives of “so what” and “now what” for the person or group coached. As coaches (or managers or HR professionals) capturing the stories, we need to consciously have the perspective that the true hero is the coaching client and their manager (or whoever is funding the effort)—not the coach.


IMPORTANT: Ensure final stories are vetted and approved by the story tellers. Sensitivity to confidentiality and trust is always top priority.


What can be evaluated?

In their book entitled “Systemic Coaching: Delivering Value Beyond the Individual" Hawkins and Turner suggest incorporating the items in the illustration below to assess coaching benefits and values, all of which connect to wellbeing, performance and engagement [7].

Image source: Toni Crow, based on Hawkins & Turner's suggestions.


In cross-organization or team coaching value creation can also be measured in retention, turnover, project metrics, sales, incident metrics, customer satisfaction / referrals, and so on.


Coaching can help facilitate priceless transformation

Over time, we become different people, different teams, different organizations. Coaching is a powerful tool that can get us unstuck, open our minds, stimulate our thinking and contribute to our authenticity and clarity. This fuels momentum in self-awareness, empowerment, transformational growth and progress. With commitment on the part of the client, this is much easier with a coach.


A brief important invitation: When evaluating coaching and coaches, be sure to check for credentials. Look for where the coach was certified, their accreditation through one of the main international standards organizations, such as the International Coaching Federation (ICF) and the European Mentoring & Coaching Council (EMCC Global), client references, and number of years’ coaching.


The client drives the bus

Never forget, this is a partnership and the client sets the agenda. The coach applies techniques to help clear the way to tap into brilliance and power that is already there. The real work and credit is yours—individuals, teams and organizations who: are open to exploring within and without; are committed to the process and their goals; come prepared for their coaching; and will follow through on actions they design toward their destination.


Additional Resources:
  1. Contact me for a set of questions you can ask when interviewing coaches a great resource used by sponsoring leaders and managers, HR professionals and in academic contexts.

  2. To explore a hybrid approach to ROI, read Nader Bechini (2017) 10 Easy Steps for Capturing the Value of Coaching. International Coaching Federation Blog.

  3. For a quick read collection of study results, check out Working Resources, The Business Case for Coaching.


Sources:

[1] Merrill C. Anderson, Ph.D. (2001) Executive Briefing: Case Study on the Return on Investment of Executive Coaching, MetrixGlobal, LLC; and Matuson, R (2023) Is Coaching Really Worth The Money? Forbes


[2] Jarosz, J (2023) Academic Paper: The Cube of Coaching Effectiveness. International Journal of Evidence Based Coaching and Mentoring 2023, Vol. 21(1) , pp.31-49. DOI: 10.24384/gkny-df71, including references to Jarosz, 2016; Jones et al., 2015; Theeboom et al., 2014, Wang et al., 2021.


[3] Jarosz, J (2023) Academic Paper: The Cube of Coaching Effectiveness. International Journal of Evidence Based Coaching and Mentoring 2023, Vol. 21(1) , pp.31-49. DOI: 10.24384/gkny-df71, including references to Grant, 2014.


[4] Grant, AM (2017). Solution-focused cognitive–behavioral coaching for sustainable high performance and circumventing stress, fatigue, and burnout. Consulting Psychology Journal: Practice and Research, 69(2), 98–111 https://doi.org/10.1037/cpb0000086


[5, 7] Trip, P; Edwards, L; Greiner, N; Moore, T (2023) How You Should Measure the ROI of Coaching, Institute of Coaching; with reference credit to Hawkins, P, Turner, E (2020). Systemic coaching: Delivering value beyond the individual. Routledge/Taylor & Francis Group.


[6] Grant, AM (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 & Practice 5:2 74-85 http://dx.doi.org/10.1080/17521882.2012.672438


[7] Hawkins, P, Turner, E (2020). Systemic coaching: Delivering value beyond the individual. Routledge/Taylor & Francis Group.


Jack J Phillips, PhD; Patricia P Phillips PhD (2005). Measuring ROI in Executive Coaching; International Journal of Coaching in Organizations, 2005, 3(1), 53-62. Professional Coaching Publications, Inc. (PCPI, www.pcpionline.com)

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