In recent years, coaching has become firmly established as a personnel development tool. Depending on the company, internal and external coaches are used for this purpose. Confidentiality is the top priority, because coaching cannot work without confidentiality. But how can you measure the quality of something whose core performance is not visible? How can you ensure that the coaching is of high quality, effective and successful?

These questions can be answered in 4 steps:

1. what is coaching used for - and what is it not used for?
2. what does coaching cost?
3. what benefits can coaching bring?
4. how can these benefits be measured?

What is coaching used for?

Coaching is one of several personnel development measures that managers in the company should use in a targeted manner. They decide whether coaching, training or mentoring is most suitable for the situation in question. Leadership issues are very often the reason for coaching. The spectrum ranges from support from a coach for the first leadership role, to the further development of one's own leadership style, to executive coaching, in which company management or top executives look at their topics from a different perspective in a targeted discussion with the coach.

Other areas where coaching is very effective include talent development, communication, conflict resolution, onboarding, DEI (Diversity, Equity & Inclusion), virtual or hybrid leadership, remote leadership, transformation, team development, stress & resilience, organizational change and organizational development.

In order to actually achieve a proverbial return on investment, it is important to weigh up whether coaching is really the most suitable measure for this topic. If you choose the wrong measure, you run the risk of wasting investment costs.

What does coaching cost?

The costs are made up of two factors:

• Money: the coaching fee that the coach charges for their services; this can be by the hour or as a package deal. Travel costs for the coach or employee may also be added.
• Time: The time that the coachee invests in the coaching and in which he or she does not work on their actual tasks.

What benefits can coaching bring?

In his article "Coaching as an investment" in the magazine "wirtschaft + weiterbildung" (issue 03/21), Felix Müller, coach of the International Coach Federation, suggested using the same guidelines for investing in coaching as for investing in machines. A new machine can either increase productivity or prevent damage (e.g. loss of production). The situation is similar for coaching.

• Benefit 1: Increase success
• Benefit 2: Prevent damage

As Müller emphasizes in his article, managers in particular have enormous leverage to produce profits or losses with their behaviour. Coaching can strengthen (or develop) those behaviors that make the coachee and, in a further step, the company more successful. For example, it has been scientifically proven that more motivated employees are not only more committed and productive, but also more innovative - all factors that increase the company's success.

Coaching can also prevent damage - for example, damage caused by managers who communicate poorly or unclearly, which leads to idle time and mistakes. Or, for example, poorly conducted meetings without achieving a goal-oriented result in the end. Even if employees are so stressed by poor leadership that they go on sick leave or even resign - these are all things that cost time and money, not to mention the loss of knowledge.

How can you measure the benefits of coaching?

In order to measure the benefits of coaching, it must be clearly defined what the goal of the coaching is. In short: if you don't know where you want to go, you can't determine whether you're already there. When measuring the benefits, a distinction can then be made between the goals of the individual coachee and statistical figures from the company. When determining the benefits of coaching, we often talk about ROE - return on expectations. What did I expect, how much of it has materialized? This applies both to the coachee themselves and to their superiors, HR managers and company management. It is very important to set realistic goals and also to weigh up the extent to which coaching is the appropriate measure for achieving these goals and what part the coaching played in their success (or lack of success).

Examples for calculating success are

Employee development goals - how well has the employee achieved their development goals? How does he see this personally, how does his manager (or other stakeholders)? What effect does this have on the achievement of team and company goals?

Motivation & engagement - many companies have their own measurement methods here (e.g. mood barometer, engagement index, leadership trust score, pulse check, etc.). Surveys show that 90% of employees who have received coaching are more motivated and committed than before the coaching.

Staff turnover & sickness rates - how high were the figures before the coaching process, how high in a certain period after the coaching? Significant changes can always be measured here.

Productivity & performance - how productive is an employee / team before the coaching, how after? What losses in performance (e.g. due to unresolved conflicts) were there before the coaching, and what after? (see also question 2 of this article).

Comparison of self-perception and external perception - especially if self-perception and external perception diverge before the coaching and are closer together afterwards, it can be assumed that the coaching was successful and that changes in behavior are perceived positively by others.

Promotion - how many employees were promoted before the coaching process, how many after? This also means how many talents were effectively developed and retained in the company?

Wellbeing - how comfortable does an employee feel before and after coaching? This can be determined through general surveys or direct feedback. For example, a manager once reported after a coaching process that he no longer needs blood pressure medication. Caution is advised here, however, as although success can be measured, it cannot be made public in detail as this information is confidential!

Satisfaction - of course, the coachee's satisfaction with the coaching itself is also measured. This is done after each session as well as at the end of the coaching process, especially in the case of platform-supported coaching. In any case, qualitative feedback should be obtained from both the coachee and the supervisor (if relevant), in which the desired and achieved behavioral changes are also discussed.

Turnover - as described above, coaching should increase success and avoid damage. Both have an impact on turnover. However, it is difficult to measure this precisely, as various measures (including marketing & sales activities, product development, other personnel development measures, etc.) have an impact on turnover.

The benefits of coaching can therefore be determined in many different ways. It is important to clearly define in advance what success is to be achieved or what damage is to be prevented, whether coaching is the appropriate measure for this and what criteria are used to determine whether this goal has been achieved. It is also important to actually evaluate the result, as this is the only way to determine whether the investment has paid off.

Finally, it is also important to ensure that well-trained, certified coaches carry out the coaching. Or would you - to use the comparison again - buy a machine that has neither CE marking nor TÜV certification? Probably not. Then you should not do the same with your coaching investment. The internationally valid, independent certifications of the International Coaching Federation (ICF), for example, offer support here, allowing you to make a pre-selection of coaches.