The ROI of team coaching

Human capital

According to the 2016 ICF Global Coaching study, we are talking about an estimated $ 2.356 billion USD global revenue from coaching in 2015. A serious amount that shows we invest in human capital. I expect this focus to remain and even grow, despite the fact that topics such as the Future of Work and UBI (Universal Basic Income) are discussed heavily these days. After all, learning is a must to help people quickly adapt to new circumstances.

ROI question

The significant global spend on coaching justifies the ROI question. Decision makers have two key questions to answer:

1)     How to defend my coaching & training budget internally

2)     How to best spend my coaching & training budget externally

For this blog, I assume that question 1 is ticked off, so let’s focus on question 2. When you google on “Coaching ROI” you will find a wide variety of calculation methods. For example methods based on increased sales, increased team productivity or decreased absence rates. Some of these are hard to measure or are blurred by other factors during the measurement.

In case of a coaching & training program, that resulted in keeping a respected employee on board, an example calculation looks like this: ROI = (20.000 USD -5.000 USD) /5.000 USD = 3. In this example, the 20.000 USD stands for a) avoided recruiting costs, b) avoided costs of bringing a new employee up to speed, c) increased productivity of the existing employee and d) increased commitment of the employee. The 5.000 USD represents a tailor made coaching & training program.

In general, there is no easy common standard to use here. This is sad news for decision makers, and it also means that the companies delivering these services need to look for alternative ways to position themselves. Because, in essence, the ROI question is about “What’s your added value compared to your competitors?”.

Our added value

To clarify what Simplify Coaching does, let’s also explain what we don’t do. We don’t do online assessments. We don’t train you on tips & tricks on how to change your behavior. We don’t do “One size, fits all”.

We know that people are quite aware of what they would like to change in their business and/or private life. And despite that awareness, people do struggle to make the actual change. So, there must be an unconscious internal force that keeps people in their existing pattern. That unconscious internal force is in your blind spot. By definition you can’t look into your blind spot and consequently you cannot talk about it in an online assessment either.

We can look into your blind spot. We can identify what pattern is withholding you to learn. And based on the same techniques, we can identify the strengths & weaknesses of a team. So we can assist both the team members and the team as a whole to improve their performance and find more balance.

Customer feedback on our added value

“It’s not a quick win, but it’s a big win”. After the first two-day training all our customers recognize and acknowledge this statement. Three main factors make them do so:

1)     We tackle a pattern, not a single case

2)     We do so in a sustainable way, so participants still apply the learnings years later

3)     We focus on the individual needs, so no “one size fits all”

This is conveyed through customer quotes such as:

·        Marketing director: “Throughout my career, I’ve never been in the situation where I’ve organized a training for my team and, more than a year later, the people are still talking about it”

·        HR director: “We are happy to see that people who took the training are now using the learnings to update their annual review targets accordingly”

·        Senior Consultant: “I’ve finally earned the project manager position I was looking for. I knew I had to profile myself better and learned what that really meant in my case”

Experience & reference check

Despite the validity of the ROI question, common standards and measurements are rare. So probably, when you are about to decide upon a team coaching spend, you will make a high value calculation including expected benefits, actual & benchmark costs (including hours spent plus travel & expenses). In this calculation the expected benefits, the promised added value, is probably the hardest to quantify in advance.

This leaves you with three options. The first option is to do try and make that estimate together with your supplier. The second option is to test their promised added value by running a pilot training for one of your teams. The third option is to do a reference check with one of their customers. We are happy to collaborate with you on all three options.