What holds you back most from getting a professional coach? Is it “Fear of the Cost (FOTC)?”
Some of us are fortunate that our manager and the organization we work for recognize the value of coaching and choose to invest, make it a line item in your department’s (or Human Resources’) budget.
Unfortunately for others, it has been just “the fortunate few,” only top-tier leaders or specially chosen high potentials who are offered coaching as part of a professional development plan, paid for by the company.
But the number of leaders interested in gaining greater self-awareness, skill development and leadership capacity building is growing. While the cost may give pause, it’s crucial that companies remember that the future of their organization is in their leaders’ hands. A strategic, short-term investment might just land them on a path that leads directly to that next role or milestone they had their eye on.
How Much Is an Executive Coach?
The short answer: It depends.
According to The Society of Human Resource Managers (SHRM), you can expect executive coaches to charge anywhere between $200 and $3,000 per hour.
While this may seem like a wide range, keep in mind that an executive coaching rate can be calculated based on a variety of factors regarding the coach, such as:
- Their amount of coaching/relevant work experience
- Their accreditation(s), certifications, education and other credentials
- Their specialization(s) (e.g. change/crisis management)
- Their depth of expertise in the client’s unique industry
- The client’s needs, goals and expectations
- The session length and frequency requested
- The amount of discovery/prep work done outside of sessions
Executive coaching that is charged at the lower end, for instance, may have coaches that lack the accreditation, experience or expertise that you’re looking for.
While a lower price may seem appealing at first, remember that there’s a drastic difference between a cheap, unvetted coach and a well-priced, organizationally vetted and endorsed coach. You can hire an unvetted executive coach for cheap on any platform online. But there’s no guarantee of the quality of service you’ll receive. You might just be throwing your money away. Hiring an endorsed coach, however, provides an extra layer of security. You’ll know that other leaders have used, and would recommend, their services. That security is well worth the cost.
Why Invest in Executive Coaching?
Investing in executive coaching is investing in yourself, in your leadership, which is investing in the success of your business.
As Joe Diab, an executive coach at The Center for Leadership Studies (CLS), astutely points out, “The strength of an organization derives from several essential elements, one of which is the effectiveness of its leaders.”
Leaders can’t be effective, however, unless they receive the necessary tools. Higher level roles require a certain level of feedback and development that executive coaching can provide.
So, while it may seem a bit expensive at first glance, consider what it’s worth for your personal development and success long term. Consider the organizational impact you’ll be able to make when your company invests in your success as a leader. What opportunities will you derive for your company with the new skills and knowledge you develop? Think of the long-term sustainability that comes from executive coaching that will breathe success into every aspect of your role as a leader.
Consider, also, what it’s worth for your team to have a leader on their team who’s not just good at what they do but who’s a truly effective leader, prepared to drive positive changes in their business.
Think of executive coaching not as an additional expense but as a strategic, tactical investment in the long-term success of you and your organization.
What’s Lost Without Executive Coaching?
For leaders, upfront, they appear to lose out on the opportunity to learn, grow and improve. But it goes deeper than that. They lose out on becoming a stronger, more reliable leader for their team. They lose out on the chance to place themselves in a better, more secure position in their organization. And they lose out on the career advancements and networking opportunities that come with being a highly capable leader.
From an organizational perspective, choosing not to invest in executive coaching could mean more than losing out on the opportunity to take advantage of all the benefits that come with it. It could mean setting themselves and their leaders up for failure.
A 10-year study conducted by Navalent revealed that a whopping 60% of executives fail within the first 18 months of their role. Why? Well, the majority reported they were offered little, if any, coaching to support them in their role.
Executives who receive little to no coaching may not be able to perform at the level that’s expected of them.
If they’re unsure of how to provide the proper support and guidance, their employees won’t be set up to succeed. Without the proper motivation, they may not even try to. As engagement and productivity levels slip, the impact could spread beyond operational efficiency. Output, revenue and retention can become a major problem.
If employees realize they’re not quite getting what they need to feel successful and satisfied in their roles, their productivity and impact may waver. They might even move to performance regression and start exploring other opportunities elsewhere.
How much will it cost to replace those employees?
Even replacing one employee could cost as much as double their annual salary and for an executive, likely more. Besides, it might not matter. Leaders set the standards at the top. If they don’t address their ineffective leadership skills, they can spread to the entire organization.
Jessica Volin, a CLS Master Trainer and executive coach, explains, “Because there is a ripple effect, organizations that decide not to invest [in executive coaching] tend to experience higher levels of ineffective leadership behaviors being shared with other team members creating lower levels of performance and resiliency in the face of ongoing change.”
Over time, this cements a culture of inefficiency that could take a lot of time and effort to correct.
Imagine this playing out in your organization then consider: What will it cost you to not invest in executive coaching?
What’s the ROI of Executive Coaching?
According to the International Coaching Federation, those who invest in executive coaching can typically expect a 7x return on their initial investment.
What’s more, Training Industry’s recent study found investors could see a financial return on their investment in as little as 3 months. Many investors could see a more instantaneous return on their investment in the form of intangible benefits. These could look like immediate behavioral changes or workplace application.
Keep in mind, however, that results will vary case by case.
Executive Coaching Fee Case Study
Whether or not the approximate cost of executive coaching fits into your current budget, let’s consider a case.
An organization wants to break into the next level, so the team decides to engage a coach for their top executive. The executive finds three individuals of interest and interviews each on Zoom. (That 30-minute interview is usually free.)
After selecting the one he feels would most effectively support and challenge him, they set up a six month contract. They agree to meet 13 times or roughly every other week for one hour.
They also agreed to set the fee at $32,000. This includes fees for assessments and additional hours for discovery with peers. Half is due at the start and the other half is due at the end.
Here is a radical thought: This young entrepreneur does not view this as a new line item in his budget. He doesn’t see it as an expense to his business that prevents other purchases or another bill to pay. He views this as an indispensable and invaluable investment. Unquestionable, even—like buying a laptop, keyboard and headset for his latest new hire to complete work.
With the executive coach’s assistance, he will get the help he needs, the perspective he is lacking and the vision into his blind spots that only “fresh eyes” and experience can bring. His coach will provide the accountability for him to grow himself in order to grow his business.
This young entrepreneur met with that coach for six months. Together, they worked diligently on developing better delegation skills, improving his decision-making and honing in on his overall direction. At its conclusion, he thanked her and went on his way. He reached out to her another six months later to say thanks. By that point, he had hired 12 additional employees. Plus, he helped establish a second office in another part of the country and added two new products to their line. He wound up tripling the value of his business, which he attributed directly to his time working with his executive coach.
Was the $32,0000 worth it? The coaching he received “paid it forward” well into six digits! His employees, his customers and not the least of all, he himself benefited from the investment.
Is an Executive Coach Worth It?
So, is it worth it for you to invest in an executive coach, even if your current employer isn’t offering it as a perk, benefit or growth opportunity just yet?
Perhaps.