Wednesday, November 7, 2012

Is Coaching a Cost Effective Solution to Retain Employees?

Posted on Wednesday, November 07, 2012 by International Coach Federation

While it would seem that coaching might be an effective way to retain employees, the question remains: is it cost effective? That's what researchers set out to discover in a recent study utilizing coaching to retain employees (Edwards and Lounsberry, 2007).

In this study, a global organization was experiencing 30 percent turnover of its new employees who chose to end their employment prior to their first-year anniversary and costing the company $116,928 per employee. An analysis of exit interviews determined that the primary cause of turnover was the chaos and disorganization created by the rapid pace of change experienced by the organization as a result of industry turmoil. Various solutions to improving the chaos and disorganization were identified, however the most practical solution to support new hires through this period of upheaval was a coaching program provided by an internal coach.

The coaching solution included four team coaching sessions for new hires and up to eight individual coaching sessions for each new hire who participated in the coaching program, provided by an internal coach. The program lasted through the employee's first-year anniversary. Participants were not told that the purpose of the program was to retain them through their first-year anniversary.

Using historical trend data and isolating for the effect of the coaching program, turnover was reduced. This resulted in a 251 percent return-on-investment after all costs - including overhead and indirect costs-were captured. Moreover, employee engagement was improved by 11 percent.

This study demonstrated that coaching, provided by an internal coach, can be a cost-effective solution to retain employees.

Edwards, Lisa Ann and Lounsberry, C. (2007). Coaching for New Employees: Global Media Company in Managing Talent Retention: An ROI Approach. San Francisco: Pfeiffer.

Phillips, Jack J. and Edwards, L. (2009). Managing Talent Retention: An ROI Approach. San Francisco: Pfeiffer.

Lisa Ann Edwards, M.S., ACC
Lisa Ann Edwards, M.S., ACC, is a partner of Bloom Coaching Institute, an organization that advances coaching effectiveness through research, tools, training and consultation on ROI of Coaching. Lisa's coaching work has demonstrated as much as a 251% return-on-investment and has been shown to lift employee engagement nearly 20%. As head of Talent Management for Corbis, a Bill Gates' privately owned global media company, Lisa was responsible for designing and implementing effective talent development solutions including leadership development and coaching programs. Lisa is a frequent contributing author to trade publications and has authored or contributed to many books including: Measuring the Success of Coaching: A Step-by-Step Guide to Measuring Impact and Calculating ROI (ASTD Press, 2012). Contact Lisa at:


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