The most recent edition of Training and Development Magazine (December 2007) includes an article by Steve Gladis entitled “Executive Coaching Builds Steam in Organizations.” Gladis references a study conducted by the Manchester Group that showed a 5:1 return on investment ratio for coaching. He further sites a report in Public Personnel Management that compared training alone to training combined with coaching. Training alone increased productivity by 22 percent but when combined with coaching, the impact increased to 88 percent.
Our own experience supports these findings. In 2001, The Pyramid Resource Group took part in one of the original return on investment studies for coaching. An independent researcher surveyed over 40 professionals from a Fortune 500 company that were part of an ongoing coaching initiative targeted at the company’s top talent pool. The study showed coaching produced a 529% return on investment and significant intangible benefits to the business. If the financial benefits from employee retention were included, the overall ROI rose to 788%.
We have always felt that coaching is one of the most powerful and efficient leadership development tools available. Fortunately, more and more investigators are validating this feeling with quantitative research.
