What is personal growth coaching's return on investment?

Anyone considering investing in personal growth coaching will want to make sure it’s worth the cost in both time and money. This page will help you decide. It contains links to articles and studies that show what life coaching has done for others, and how to consider its potential impact in your life.

We'll use a formula familiar to all investors: Return on Investment (ROI). It measures the return relative to cost and is calculated by dividing the benefit by the cost. We express ROI as a percentage or ratio. Any ROI above zero is considered "favorable". It's inevitable that ROI calculations for future investments rely on estimates and assumptions, the goal is to make these plausible so that the result becomes a useful tool for predicting an outcome. 

ROI = (Return from Investment – Cost of Investment) / Cost of Investment

Now let's convert life coaching benefits to hard-and-fast numbers.

On this page there is a list of fifteen "intangible" benefits of life coaching. We'll assign each a value of $500 for a total benefit of $7,500.   

It is well established that personal and professional development makes happier employees, and happy employees are more productive. As a result of your life coaching, you may earn a promotion or find a new, better paying job. Personally, I wouldn't change jobs for less than an additional $10,000 per year, so we'll use that number as our benchmark.

Cost of Coaching Program:               7,000
Benefits of Coaching:
* Work Promotion                            10,000
* Qualitative Variables
(Less stress, more
positive outlook, etc.)                        7,500
Total benefits:                                   17,000

Return on Investment:  (Benefits - Cost) / Cost
                (17,500 -  7,000) / 7,000 = 1.50 = 150%

This means that your investment in yourself earns you one-and-a-half times it's cost. That's a tremendous return by any measure!

But here's the icing on the cake: this ROI is just for the first year! The benefits accrue over time, which multiplies the value of your initial investment even more. Do you see why investment in yourself has such great leverage? It touches every area of your life and adds tremendous value over time.

Not everyone assigns value this way, of course. We've converted the benefits of life coaching to numbers because that's what the formula requires. If the intangible benefits outweigh the expected costs on their own merits, then a person can feel good about having made a wise decision.

What is the Impact of Personal Development Coaching?

In 2017, PricewaterhouseCoopers Research surveyed over 27,000 people from 30 countries, asking what areas of their life were affected by personal and professional development coaching. Here's what they discovered:​

• Improved business management strategies (30%)
• Expanded professional career opportunities (29%)
• Increased self-esteem/self-confidence (40%)
• Improved work/life balance (34%)
• Optimized individual/team work performance (38%)
• Increased productivity (39%)
• Accelerated on-boarding into a new professional role (22%)
• Improved communication skills (42%)
• Increased well-being (32%)

Want more? A Manchester Consulting Group study of Fortune 100 executives reported in the Economic Times that "coaching resulted in an ROI of almost six times the program cost as well as a 77% improvement in relationships, 67% improvement in teamwork, 61% improvement in job satisfaction and 48% improvement in quality."

They also discovered that “. . . individual clients reported a median ROI of 3.44 times their investment in coaching. Bottom line, coaching is an investment that can produce monetary rewards above and beyond the cost.”

By that measure, our example above may have drastically underestimated the benefits of life coaching!

The bottom line:

The evidence is clear: coaching is a smart investment in your personal and professional development that can reward you monetarily. The benefits don't end there, though. Personal growth coaching helps us improve our physical and emotional health, our relationships, and our inner spiritual well-being, for a better quality of life.

References

Coaching Federation Consumer Awareness Study
Coaching Federation Global Coaching Study
Achieve Today Coaching ROI formula
Life Coach Training ROI for Coaching

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