Coaching can deliver an average ROI of 5.7 times the initial investment

A 2001 study on the impact of executive coaching by Manchester Inc. showed an average ROI of 5.7 times the initial investment or a return of more than $100,000 — according to executives who estimated the monetary value of the results achieved through coaching.

The respondents were executives from large (mostly FORTUNE 1,000) companies who had participated in either “change oriented” coaching, aimed at improving certain behaviors or skills, or “growth oriented” coaching, designed to sharpen overall job performance. The programs lasted from six months to a year. About 60% of the executives were ages 40 to 49 — a prime age bracket for career retooling. Half held positions of vice president or higher and a third earned $200,000 or more per year.

Among the benefits to the companies that provided coaching:

• Productivity (reported by 53% of executives)
• Quality (48%)
• Organizational strength (48%)
• Customer service (39%)
• Reducing customer complaints (34%)
• Retaining executives who received coaching (32%)
• Cost reductions (23%)
• Bottom-line profitability (22%)
• Among the benefits to executives who received coaching were improved:
• Working relationships with direct reports (reported by 77% of executives)
• Working relationships with immediate supervisors (71%)
• Teamwork (67%)
• Working relationships with peers (63%)
• Job satisfaction (61%)
• Conflict reduction (52%)
• Organizational commitment (44%)
• Working relationships with clients (37%)

Training combined with coaching is a powerful tool to increase productivity

A research study covered in “Public Personnel Management” found businesses received powerful results from combining coaching with training. While training alone increased productivity in the workplace by 22.4%, training plus coaching increased productivity by 88%.

Latest News on Productivity:
Reed Business Information Survey in Personnel Today
3.25.08

The drive to boost productivity has seen performance improve for the majority of organizations over the past 12 months, according to a survey by Personnel Today's sister publication Employment Review. These findings suggest that many organizations believe personal development and better communication should be central to productivity-raising strategies.

The 75 employers who responded had a combined workforce of 340,000. More than half (55%) had seen productivity gains over the past year, while 9% claimed productivity had risen significantly. And half reported year-on-year productivity gains over the past three years.

The top four barriers to increasing productivity, said respondents, were the inability to recruit suitable staff (37%), lack of management skills (31%), employees' attitudes or commitment (29%) and poor organizational communication. Training for managers was the most popular measure employed to increase productivity in the workplace, cited by 51% of respondents, followed closely by performance management (48%) and the promotion of organizational objectives or vision (45%).

When asked to select the top three measures that have had the biggest impact on improving productivity, performance management was the most popular. It was cited by 19% of respondents, including eight employers that rated it as the most effective intervention.

These findings suggest that many organizations believe personal development and better communication should be central to productivity-raising strategies. The actual productivity increases achieved by those surveyed ranged from 5% to 75%, although the median increase in productivity over the past three years was found to be 10%.

The majority of respondents are also confident that this upward trend will continue, with 53% expecting performance to improve over the next 12 months, and 57% hopeful that they will increase it over the next three years.

The findings also show that 66 of the organizations surveyed formally monitor changes in productivity, while the remainder use informal methods.  Nearly two-thirds (64%) of respondents measure the productivity of individual employees, while 63% measure it across the organization. The majority also report measuring productivity at team (60%) department (60%) and divisional (59%) level.  About 17% of employers compare their productivity performance with their competitors, and 13% compare it with the benchmark for their sector.

© 2008 Reed Business Information Ltd.

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