The Increasing Demand for Executive Coaching | College of Executive Coaching
Coaching Article

The Increasing Demand for Executive Coaching

June 1, 2022
By Jeffrey E. Auerbach, Ph.D., MCC

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Has demand for executive coaching increased? If it has, what is driving the increase?

Yes, demand for executive coaching has grown and is continuing to grow. Chief Learning Officer journal reported (2021) that more than 70 percent of organizations offer some type of leadership coaching, and another 22 percent would like to offer coaching if they can find the budget for it. Of the 70 percent that are using executive coaching, over 40 percent of the organizations report their investment on executive coaching has increased from 2020 to 2021.

The Increasing Demand for Executive Coaching

What's driving the popularity of executive coaching?

The world has changed radically since the onset of the pandemic. The demand for effective leadership training was at a high before the COVID-19 pandemic. Then the health crisis, the global economic downturn and "the Great Resignation" have all contributed to an even greater need for effective leadership development. Coaching has turned out to be the most effective method for just-in-time leadership development and fortunately coaching via videoconference and telephone fit perfectly with the work from home trend.

Three factors drive the need for increased focus on developing leaders and employees in general.

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Gallup's State of the Global Workplace Survey shows us that 85% of people in the global workforce are disengaged, often meaning they are not invested in the success of their organizations and possibly ready to jump ship for other job opportunities, whether they're actively looking or not.

One of the most cited outcomes of executive coaching is how well it promotes engagement and boosts job satisfaction. The recipient of coaching not only feels they are receiving a special kind of support, but they also feel positive about the investment being made in them. Although coaching is often used with high performers to help them be successful after being promoted into a new role, it is also increasingly being widely used, with a large part of the workforce, to boost engagement, career satisfaction and productivity.

Disengagement causes low productivity and motivation, as well as high employee turnover. Disengaged employees cost organizations approximately 500 billion dollars each year. Organizational leaders are desperate to solve this problem hence the growth in engagement building methods such as helping managers and employees affirm employees' strengths. A popular coaching strategy is to help individuals become more aware of, and utilize, their strengths more frequently each day, which causes more career satisfaction and boosts engagement. This is just one technique that organizational leaders are increasingly becoming aware of from executive coaches. Moreover, 74% of North American organizational leaders rate leadership development as important or very important and coaching has become one of the most popular leadership development processes.

Exponential Rate of Change

We've all seen the rate of change skyrocket in the past few years. The shift to virtual work, the amount of change in our economy, the number of new products, services, and companies all has changed quickly and dramatically. There has been no rule book to guide us in how to change and how to manage the changes that are thrust upon us. Coaching provides a one-on-one process of supporting the coaching client to adapt to rapid change constructively. Coaching helps one to sort out what are the most important goals to focus on and how to get additional support to manage the onslaught of change.

Coaching Works and has a Stellar Return on Investment

Coaching works and is seen as the most tailored and focused of all the leadership development efforts.

The International Coaching Federation (ICF) released a global study in partnership with PriceWaterhouseCoopers that found:

  • Out of 2,165 worldwide coaching clients polled, 96% of respondents indicated that they would repeat the coaching experience given the same circumstances that led them there in the first place
  • 86% of companies who were able to calculate ROI on the coaching engagement indicated that their company had at least made their investment back, with almost 30% of those saying they saw an ROI of 10 to 49 times their investment

The Manchester Review published research on 100 executives who received executive coaching. They found:

  • 86% of participants indicated that they were "very satisfied" or "extremely satisfied" with the coaching process
  • 93% responded that they would recommend coaching to others

Furthermore, executive coaching has been found to be more effective than other management training and development methods. In an article in Management Decision, 236 human resource managers were surveyed, and they indicated that they have found that executive coaching was the most effective development method they have utilized to provide sustained and observable management behavior changes.

As more companies turn to coaching to drive performance, those that don't, may find themselves falling behind. Leadership coaching is no longer a luxury. Adopting the best leadership development path can make a company more productive and competitive in an increasingly demanding global business environment as well as creating a happier workforce.

Sounding Board and CLO's recently published survey findings, conducted between June and July 2021, from more than 450 learning and development practitioners on organizational use of coaching. They found that leadership coaching for talent development and employee retention was booming.

Leadership coaching for talent development and employee retention is booming.

Key Takeaways

Most organizations now use executive coaches and the ones that don't may be at a disadvantage. Organizations report a range of benefits from leadership coaching, including higher employee engagement, retention, productivity, and greater leadership bench strength. Challenging conditions are predicted to continue, creating a continued increase in executive coaching demand.

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