Research Paper: The Impact of Coaching on Employee Retention

Michelle Cunningham_Research_PaperResearch Paper By Michelle Cunningham
(Career & Leadership Coach, UNITED STATES)

Introduction

In today’s economy, cost-cutting strategies are on everyone’s mind.  For companies both large and small, finding a way to control costs is a key to becoming and remaining successful.  One cost that may easily get overlooked is the cost of recruiting new employees.

By some estimates, it can cost an employer double an employee’s salary to replace them when they quit. That cost varies across different industries, but for some employers, it can be even higher.[i]

One clear way to reduce the cost of recruitment is to focus on employee retention.

As an internal coach for my company, one of the things I must consistently consider is the impact that coaching has on my company.  To show a return on the investment that my company provides in supporting my coach education and certification, I must be able to articulate the value that coaching brings.  I believe that one-way coaching can have an impact on a company’s bottom line is by increasing the retention of its employees.

As I coach, I help to support my company’s employee retention efforts by supporting several strategies that can boost employee retention.  These strategies include:

  • Cultivating leadership
  • Promoting engagement
  • Supporting development

In this research paper, I will explore each of these three strategies, and how establishing a successful coaching program for employees can have a positive impact in these areas.

Cultivating Leadership

To cultivate leadership within a company, let’s first explore the characteristics of effective leaders.  This list of effective leadership characteristics provided by Chris Halvorson in his article “7 Great Employee Retention Strategies” sets the groundwork for understanding key leadership behaviors.

  • The clear direction towards the future. Good leaders let employees know where the company is headed. Bosses don’t share information and leave employees wondering if there’s good or bad coming down the pipe and if they should be concerned.
  • Able to handle challenges. Leaders handle the many challenges that come their way instead of intentionally or unintentionally offloading the stress onto the employees.
  • Genuine desire to offer high quality. For both customers and employees, good leaders offer the best products, services, and experience possible. Bosses are almost behind the curve, scrambling to meet the minimums.
  • A belief in the importance of people. Good leaders consider employees their most important asset. Bosses are focused on numbers.
  • Inspires confidence. Good leaders make employees feel confident about their ability to lead them to a good place. Bosses tend to inspire passive-aggressive frustration as employees question the decisions that have been made that have affected them negatively.[ii]

Identifying which of these key leadership characteristics are strengths, and which are opportunities, for the leader in the first step.  By establishing a coaching relationship, current and future leaders can take the time to focus on themselves and the key leadership attributes such as those identified in Halvorson’s article, they need to be successful as a leader.

For example, if an aspiring leader has difficulty when faced with challenging situations, a coach may invite him/her to explore the various perspectives of a difficult situation.  Leveraging the framework of Emotional Intelligence, the coach can support the aspiring leader in developing an action plan to be able to more effectively manage the difficult situation.

While the benefits of establishing a coaching relationship are numerous, an article on insala.com titled “Why is a leadership coaching important?  Th 5 key benefits” from February 15, 2019, offers up the following:

1. Empowerment

Coaching empowers leaders to do exceptional work. Coaches establish an advantageous relationship that uncovers hidden strengths and weaknesses within the leader. Goals will be created to enable leaders to pinpoint their weaknesses and track their progress. Reflective sessions with a coach empower a leader to fully recognize their improvements and appreciate the work they have done to meet those goals.

2. New Insight

Leaders gain a new perspective on everyday responsibilities from their coach. The coach pushes them to step back and reflect when a leader is having a bad day or week, often uncovering a deeper problem. Together, they discover new insights into the leader’s reaction by analyzing the problem and creating a plan for similar situations in the future.

3. Free Thinking

Coaching reduces narrow-minded thinking in leaders. Coaches encourage the leader to open their thought patterns and consider other points of view by asking questions. This benefits the leader by provoking free thoughts and encouraging flexible leadership. The Center for Management and Organization Effectiveness calls flexible leadership a “business necessity” as it allows for quick, creative, and precise decision making under pressure.

4. Enhanced Performance

Targeting coaching to a leader’s problem area makes a huge difference in attitude and abilities. Coaching allows the leader to learn and implement new leadership techniques tailored to the leader’s weaknesses. Techniques include the leader avoiding the terms “but,” “no,” or “however” as they accidentally discourage ideas or answering questions with questions as they tend to supply all the ideas for their team. Individuals that were difficult to reach before will respond better to their leader’s new approaches.

5. Improved Communication

Coaching enables leaders to realize that their communication isn’t always as clear as they think. Coaches will highlight areas of communication that need improvement and practice those areas with the leader.

Coaches can also teach leaders how to communicate with individuals of different personality types, cultures, or ages using their past experiences as examples. Good communication skills allow people to connect. A coach who can guide an individual to communicate effectively will improve their credibility and overall leadership abilities.[iii]

While the benefits are numerous, by supporting the cultivation of leaders and leadership skills through coaching, companies can not only help their leaders to be successful in their roles but also make positive strides toward increasing employee retention.

Promoting Engagement

The second strategy for increasing employee retention that I will explore is promoting employee engagement within a company.  A Gallup study shows that disengaged employees are more likely to leave their company.  This article “Are Your Star Employees Slipping Away” by Jim Harter and Amy Atkins, both from Gallup, reiterates this finding.

The more disconnected employees feel, the greater their readiness to job hop becomes. While 37% of engaged employees are looking for jobs or watching for opportunities, higher numbers of employees who are not engaged or actively disengaged are doing the same (56% and 73%, respectively).

Workers want to feel connected to their jobs, managers, and companies. If those ties are not there, they have more incentive to quit, leaving their organizations to start the costly recruitment, hiring, and onboarding dance all over again. This could also cost companies some of their best people.

Improving engagement has to start with organizations closely examining how they attract, retain, and engage employees. They must give employees a reason to choose them, stay with them, and perform at their best.[iv]

By offering coaching opportunities to their employees, companies can improve employee engagement in many ways.  Employees who feel connected to their work are more engaged in hat work.  One way to help employees feel connected to their work is through goal setting.  As suggested in this article by insala.com from August 28, 2019, coaching can play a role in increasing employee engagement through goal setting:

Goals are not limited to the overall organization, though. Individuals are also highly goal-motivated. Coaching is a great way to empower your employees to set great goals and actually achieve them. This increases employee engagement because employees feel involved.[v]

A second factor that promotes employee engagement is a sense of trust and accountability.  The above-mentioned article from insala.com also suggests that coaching can support employees to feel empowered and to take responsibility, both of which boost engagement:

Through coaching, an organization can improve employee engagement by preventing accountability obstacles such as “learned helplessness”. Coaching employees empowers them to take responsibility for their learning and development.[vi]

By promoting engagement through coaching employees on the aspects of goal setting, building accountability and trust, and any other engagement factors, they will experience the many benefits of an engaged workforce.  As Gallup’s research suggests, engaged employees are more likely to stick around, thus increasing employee retention.

Supporting Development

Finally, the third retention strategy that I will explore is for companies to support the development efforts of their employees.  According to a blog post on Culture titled “Focusing on learning and development to increase retention” by Amp by Alexis Croswell, Senior Content Marketing Manager, retention is one of the advantages to companies who support employee development.

People want to be employed by organizations that will increase their job prospects down the line. It’s easy to see why: individuals whose value in the workforce is bolstered by their organization can also expect greater personal chances for growth and financial success.

For these reasons, organizations that proudly tout their ability to boost people’s future employability reap recruitment benefits. But there’s more to it: Culture Amp data shows that 54% of immediate retention is associated with the employee’s belief that their company contributes to their development.[vii]

Having a coach and participating in a long-term coaching relationship is one significant way to support an employee’s personal and professional development.  As employee development goals are sometimes personalized and unique, a more personalized solution is often more fitting for development efforts.  As suggested in the “Benefits of Coaching” by the Institute of Coaching, coaching can be a viable solution:

Coaching provides an invaluable space for personal development. For example, managers are frequently presented with employees struggling with low confidence. The traditional approach would be to send them to an assertiveness course and hope this addresses the issue. In the short-term, the employee learns new strategies for communicating which may improve confidence. Unfortunately, in isolation, these courses rarely produce a sustained increase in confidence. Although external behavior may change; it needs to be supported by changes in their internal thought processes. This is often where coaching is most effective.

Additionally, the Society for Human Resources Management (SHRM)reinforces the individualized nature of coaching in this definition provided in an article titled “Coaching in a Business Environment”:

The hallmarks of coaching are that it is personalized and customized and that it is usually done one-on-one and over a period of time, and with a specific business objective in mind. Coaching is similar to, but distinct from, mentoring. The latter is a career development method whereby less experienced employees are matched with more experienced colleagues for guidance either through formal or informal programs. Coaching is frequently used to assist individuals as they prepare for or move into new assignments, improve work habits, adapt to a changing environment, or overcome specific obstacles.[viii]

By supporting development through coaching programs, companies show employees that they are investing in their future and providing them with growth opportunities.  This investment into the personal and professional development of employees will result in increased employee retention.

Conclusion

As this research shows, there are many elements to a successful retention strategy that companies may employ.  Throughout this research paper, I explored three such strategies – Cultivating Leadership, Promoting Engagement, and Supporting Development – and have come to this conclusion:

Leadership + Engagement + Development = Retention

The secret ingredient in this recipe is Coaching.

Whether a company chooses to employ internal coaches, leverage the services offered by external coaching vendors, or invest in developing their managers and leaders into exceptional coaches; the investment into coaching their employees will boost multiple aspects of their retention strategy.  If done right, companies will reap the return on this investment through cost savings in their recruiting, hiring, and onboarding efforts. The benefits of supporting a coaching culture don’t stop there.  However, that is a discussion for another research paper!

References:

[i]Halvorson, C – 7 Great Employee Retention Strategies

[ii]Halvorson, C – 7 Great Employee Retention Strategies

[iii]Insala.com – Why is Leadership Coaching Important?

[iv] Harter, J, and Adkins, A – Are Your Star Employees Slipping Away

[v]Insala.com – Increasing Employee Engagement Through Coaching

[vi]Insala.com – Increasing Employee Engagement Through Coaching

[vii]Croswell, A – Focus on learning and development to increase retention

[viii] SHRM – Coaching in a Business Environment

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