Coaching has evolved from a mere “nice-to-have” into an indispensable resource. Now, more than ever,coaching is a critical, strategic program that organisations can use to not only weather a tough market but enable growth in their people.

Drawing from our extensive experience working closely with HR and L&D leaders across diverse industries, geographies, and organisational types, one resounding theme emerges: coaching offers substantial and sustainable benefits. More importantly, measurable benefits that tie directly to business performance and work outcomes.

Why are you investing in coaching?

As Customer Success professionals at an organisation that offers coaching to Fortune 100 companies worldwide, we find ourselves asking “What does a return on your investment in coaching look like to you?” Is it:

• An amount of dollars saved or earned? 
• Changing someone’s life and career trajectory? 
• Supporting leaders in moments of transition? 
• Better representation in your leadership pipeline?

There are a variety of use cases but building a solid case for ROI on coaching starts with clarifying the organisation’s goals early in the journey.

Measuring the ROI of Coaching is Attainable

The Kirkpatrick model has been widely used for decades and continues to be an evidence-based framework to measure the efficacy of a learning and development program. In this model, programs are measured at four levels: 1) reactions, 2) learning, 3) behavior change, and 4) business results.

As we go higher up in this pyramid, it becomes increasingly challenging to measure but also more impactful. Demonstrating impact beyond participant self-ratings is critical. When you can show that participants not only enjoyed the program but learned new skills and behaviors that are noticed by others–ultimately driving metrics like retention, promotion and engagement – it is harder for business leaders to overlook the impact and not invest in coaching. With scaled coaching, and a solid people development platform partner, understanding the impact of coaching on the individual, their teams and the broader organisation is not an ambiguous, unattainable goal. 

The Impact of Coaching on Participants

Now, let’s delve into the tangible impact. A recent study conducted by Torch.io, unveils the primary areas where coaching participants reported personal behavioral changes: they were in self-awareness and confidence. These changes serve as precursors to promotions and heightened retention rates. Yet, there is more to the story.

Coaching also spurs interpersonal behavioral shifts, with participants reporting newfound abilities to influence others and navigate complex conversations. When we explore the outcomes catalyzed by coaching, the narrative becomes even more compelling. In just six months, a remarkable 70% of participants believed that the quality of their relationships with team members had undergone significant enhancement.

This improvement in team relationships directly impacts team performance and productivity. Yet another barometer of success is the ripple effect of coaching–the impact coaching has beyond the individual participant, to the direct reports, teams, and broader organisation.

As a practical illustration, we forged a strategic partnership with a prominent global technology company. In this collaborative effort, we conducted a controlled study involving two distinct sample groups: one group underwent our coaching program, while the other did not.

To ensure the validity of our findings, we meticulously matched participants based on their tenure and job titles, ensuring that the control group closely mirrored the coached group.

The results of this study were remarkable. Those individuals who participated in our coaching program were 68% more likely to stay with their organisation. In fact, those individuals completed, on average,one additional year of service compared to their non-coached counterparts.

These findings take on even greater significance when considering the substantial cost of replacing an outgoing employee, which can approximate nearly 100-200% of their annual salary. Coaching not only contributes to talent retention but also offers a tangible return on investment.

One coaching participant articulated the value of coaching, sharing that, “Impartial feedback is immensely valuable. We all possess blind spots in our professional relationships, and my coach has proven instrumental in helping me identify and address these, challenging my underlying assumptions, and recognizing the unique value I bring to my organisation. The investment of time and energy in coaching is undeniably worthwhile.”

Coaching isn’t merely an investment; it serves as a catalyst for growth both at an individual and organisational level.

The authors, Pritika De Noronha and James Williams are Customer Success leaders at Torch.