This article provides further details about the Organizational ROI card on the Sponsor Overview Insights dashboard. This insight card connects financial investment in coaching with the anticipated return, using industry-standard salary benchmarks. This article explains why coaching ROI can be high, how coaching ROI compares to training ROI, how this insight is calculated, and typical results to expect.
What does good coaching ROI look like?
1. How ROI Is Calculated
- ROI = (Benefit – Cost) ÷ Cost
- Benefits are derived from leader performance improvement estimates, tied to salary benchmarks.
- Costs are what your organization invests in coaching.
- This ROI calculation is grounded in the Phillips Evaluation Model.
It helps answer the question: For every dollar spent on coaching, how much value is being reinvested back into the organization through improved leadership performance?
2. Typical vs. Exceptional Outcomes
- Typical Coaching ROI: 3x–5x return (for every $1 invested, expect $3–$5 back in organizational value).
- Exceptional Coaching ROI: 8x+ return — standout cases where conditions amplify impact (e.g., high-salary leaders, broad cultural shifts, or unusually strong coaching outcomes).
- Occasional Very High ROI (20x–50x): Customers may sometimes see extremely large numbers. These often arise from smaller cohorts (where one or two leaders’ improvements disproportionately influence the results) or from exceptionally high-quality coaching engagements that drive breakthrough performance. While less common, these outcomes are valid and reflect how coaching impact can scale under the right conditions.
3. Comparison: Coaching vs. Training ROI
- Traditional Training ROI: Often cited in the range of 50–200% (1.5x–3x return).
- 1:1 Coaching ROI: Industry benchmarks show substantially higher returns due to sustained behavior change and leadership impact.
Why Does Coaching ROI Tend to Outpace Training ROI?
Coaching targets higher-level leaders, reinforces lasting behavioral shifts, and has multiplier effects across teams, it consistently delivers larger and more durable returns than traditional training programs.
1. Leader Salary Leverage
- Coaching often targets mid- to senior-level leaders.
- These individuals have higher salaries, so even modest improvements in effectiveness translate into large financial impact.
- Example: A 5% performance improvement from a VP making $200K has a far larger dollar benefit than the same percentage for a frontline employee earning $60K.
2. Sustained Behavior Change
- Training usually delivers a “moment-in-time” boost in skills. Retention decays quickly without reinforcement.
- Coaching is personalized and ongoing, embedding learning into daily leadership practices.
- This makes the performance improvements stick, leading to long-term compounding returns rather than one-off gains.
3. Multiplier Effect of Leadership
- Leaders influence not just their own output but also their teams.
- When a leader improves, their team’s engagement, productivity, and retention rise as well.
- This multiplies ROI across dozens or hundreds of employees, which is rarely the case in individual training programs.
4. Alignment with Strategic Priorities
- Coaching conversations are often tied directly to strategic business outcomes (e.g., navigating transformation, retaining top talent, accelerating innovation).
- This alignment means the value created is more directly connected to organizational goals, unlike general training that may stay abstract.
5. Reduced “Time-to-Value”
- Leaders can apply coaching insights immediately in live situations, from decision-making to conflict resolution.
- Faster application = faster visible results = stronger ROI profile.
Why Organizational Coaching ROI Can Be So High
Typically, organizations see a 3–5x return on coaching investments, and anything above 8x is considered exceptional.
Sometimes, organizations will see ROI in the 20x–50x range. These outcomes can happen for two reasons:
- Coaching has smaller cohorts, where one leader’s performance drives a disproportionately high return.
- Exceptional coaching quality, where breakthroughs in leadership behavior leads to extraordinary organizational gains.
Leader Salary Leverage
Coaching usually focuses on mid- and senior-level leaders. These are individuals whose decisions and performance carry outsized weight in the organization. A small improvement in effectiveness from someone earning $200K or more can quickly translate into hundreds of thousands of dollars in business impact. That’s why the ROI equation often shows larger returns compared to training frontline employees.
🔎 Supporting Insight: Studies in executive development (Center for Creative Leadership, 2021) show that leadership effectiveness is directly correlated with team productivity and retention, which magnifies the financial return.
Sustained Behavior Change
The science of learning tells us that people forget about 70% of what they hear in training sessions within a week if it’s not reinforced. Coaching works differently. It provides reinforcement over time, which helps leaders actually change their behavior. That means the improvements are not just temporary — they stick. And because they stick, the financial benefits compound year over year.
🔎 Supporting Insight: The “Ebbinghaus forgetting curve” is well-documented in behavioral psychology. Coaching mitigates this through reinforcement and personalized application.
Multiplier Effect of Leadership
Another reason coaching ROI looks so high is because leaders multiply value. When a manager becomes a stronger leader, it doesn’t just affect their own output — it cascades across their team. Engagement goes up, retention improves, and productivity rises. So, the ROI isn’t just the leader’s improvement; it’s the ripple effect across everyone they influence.
🔎 Supporting Insight: Gallup research shows that managers account for 70% of the variance in team engagement, which directly links to turnover, productivity, and profitability.
Alignment with Strategy
Unlike generic training, coaching is tied directly to real work. Leaders bring live challenges — like driving a transformation initiative, retaining top talent, or improving collaboration. Because the coaching is aligned to those strategic goals, the impact shows up faster and in areas the business already values.
🔎 Supporting Insight: The Phillips ROI Methodology (used in our platform) has shown for decades that interventions tied to strategic objectives deliver the highest measurable ROI.
Conclusion
When coaching ROI numbers are larger than traditional training — even in the 20x to 50x range — that’s not a fluke. It’s the natural result of targeting high-salary leaders, embedding sustained behavior change, and multiplying impact across teams.
While 3–5x is typical and 8x+ is exceptional, extraordinary ROI is possible under the right conditions, and it highlights just how powerful coaching can be for organizational performance.