How is executive coaching priced?

Three models are common:

  • Fixed-fee engagement. One price covers a defined period, typically six or twelve months, including assessment, sessions, and reviews. This is the most common model for senior executives because it removes any incentive to ration or pad sessions.
  • Retainer. A monthly fee for ongoing access, common for chief executives who continue after an initial engagement.
  • Hourly or per-session. More common below the executive level and on coaching marketplaces.

What drives the price?

  • The coach’s experience and demand. Coaches who work mainly with chief executives charge more than generalists.
  • The level and complexity of the role.
  • What is included. A 360 assessment, stakeholder interviews, three-way meetings with the sponsor, and access between sessions all add value and cost.
  • Length. Twelve-month engagements cost more in total but usually less per month.
  • Travel and in-person time.
  • Scale. Coaching several leaders or a whole team is often priced as a package.

Because fees vary so widely, ask every provider for an all-in price for the whole engagement and a list of exactly what it covers. Comparing hourly rates alone is misleading.

Who pays for executive coaching?

In most cases the employer pays, because the organization benefits. For a chief executive, the board typically approves it as part of the CEO’s development plan or includes a development allowance in the employment agreement. See A board's guide to executive coaching.

Being sponsored does not change who the client is in the room. The leader’s sessions remain confidential. See Confidentiality in executive coaching.

Is executive coaching worth it?

Meta-analyses of workplace coaching (Theeboom and colleagues, 2014; Jones and colleagues, 2016) report positive effects on performance, skills, well-being, and goal attainment. Individual results depend on the leader’s readiness, the coach’s skill, and the organization’s support.

Precise ROI percentages for coaching are hard to defend, because leadership outcomes have many causes. A more honest approach compares the fee with the cost of the risks it reduces:

  • A senior executive who fails. Replacing a senior leader involves search fees, months of vacancy, lost momentum, and often the departure of people who worked for them.
  • An unready successor. A chief executive transition that goes badly can cost a credit union strategic years, and in some cases its independence. See Credit union succession planning.
  • A senior team that does not function. Slow decisions and silo conflict are paid for daily, by everyone below the team.

Against costs of that size, a coaching engagement is a small premium.

How to protect the investment

  1. Coach people who want it.
  2. Tie goals to what the organization actually needs from the leader.
  3. Start with assessment and end with re-measurement.
  4. Keep the sponsor involved at the beginning, middle, and end without breaching confidentiality.
  5. Choose the coach carefully. See How to choose an executive coach.

Frequently asked questions

Is executive coaching a taxable benefit or a business expense?

Coaching that an employer provides to improve an employee’s performance in their current role is generally treated as an ordinary business expense. Tax treatment depends on the facts, so confirm with your accountant.

Why is executive coaching more expensive than other coaching?

The pool of coaches with real experience at the top of organizations is small, engagements include more assessment and stakeholder work, and the value at stake in a senior role is far larger.

How should a credit union budget for coaching?

Most budget per leader per engagement, within the executive development or board-approved CEO development line. Institutions that coach several leaders each year often negotiate a package. See How to build a coaching program at a credit union.

Can coaching ROI be measured in dollars?

Sometimes, where a specific outcome can be isolated, such as a retained executive. More often the credible evidence is behavioral: re-measured 360 results, stakeholder feedback, and delivery on the goals set at the start. See How to measure executive coaching outcomes.

Sources

  • Theeboom, T., Beersma, B., and van Vianen, A. (2014). Does coaching work? A meta-analysis on the effects of coaching on individual level outcomes in an organizational context. The Journal of Positive Psychology.
  • Jones, R., Woods, S., and Guillaume, Y. (2016). The effectiveness of workplace coaching: A meta-analysis of learning and performance outcomes from coaching. Journal of Occupational and Organizational Psychology.

Related reading

This page is educational and general in nature. It is not legal, regulatory, or clinical advice. Questions or corrections: coaching@syntrinaleadership.com.