Asking how much the cost of executive coaching is a little bit like asking how much it costs to eat dinner in New York City… It depends. Will you be eating at a food cart on the Hudson River Greenway? Name-dropping at an exclusive bistro on the Upper West Side? Dining at a chain restaurant in Times Square? Enjoying a 2-star Michelin restaurant in Tribeca? As you can imagine, the cost of your meal will vary dramatically!
Nevertheless, there is a bottom-line cost of executive coaching, and it’s important for you to have some sense of what a “ballpark” figure might look like. So let’s define some parameters, look at some industry data, and break it down for you.
First, Broad Industry Numbers
When we first wrote about this topic in 2013, The Conference Board had just conducted a statistically vigorous survey. They found that executive coaching rates generally ranged from $200 to over $600 per hour. A few years earlier, in 2009, The Harvard Business Review placed the median rates for an executive coach at $500/hour, with an hourly range of between $200 to $3,500 per hour.
More recent data from an ICF Global Coaching Study found that experienced executive coaches earn more than $150,000/year. This translates to executive coach cost averaging $607/hr. The Society of Human Resource Managers (SHRM) also reported in an article, that “Coaches charge between $200 and $3,000 an hour.”
We think the most reliable way to extract current executive coaching costs is twofold:
- Apply an inflation multiplier from the reliable 2009 numbers to get us to 2023. The result? The median cost of executive coaching today is approximately $708/hour. ($1 in 2009 has the same “purchasing power” or “buying power” as $1.42 in 2023. CPI Inflation Calculator). Given that during this time, coaching has also become exceedingly more common amongst top executives, and relatively few coaches with a decade or more experience are available, we believe this number — while an accurate inflation conversion — underestimates the top end of the scale and is likely too low.
- Ask actual coaches and coaching companies. When we asked 25 coaching companies about how they package their services and their pricing, responses varied (sometimes dramatically) but we did find the $717/hour rate to be squarely in the midrange of responses.
We suggest this $717/hour be your starting point for executive coaching costs.
What Impacts the Cost of Executive Coaching Engagement?
As we said, you now have a starting point. But it should not necessarily be the final number against which you measure your executive coaching options. Naturally, several factors contribute to the final cost of executive coaching firms and executive coaches.
1. What “Level” of Coaching is Needed?
Typically, the higher the level of the coachee in their organization, the higher the coaching rate. Simply put, it costs more to coach a CEO (CEO coaching) than a department head. In part, this is because the higher the coachee’s level in the organization, the greater the impact that coaching has on the business.
It follows that certified coaches with a proven track record of working with CEOs and senior-level executives will command a higher fee than coaches who are less qualified, or coaches who coach individuals at a lower level in an organization. There’s more on the line. This is true of coaching firms as well — some firms have cadres of coaches with a great deal of expertise at the senior executive level of mid-size and large organizations, and some offer experience with middle managers and team leaders.
Working with CEOs and senior executives typically demands a more educated, experienced coach. The work also usually requires the coach to have a broader and deeper understanding of the dynamics of the coachee’s business.
Which “level” of coach do you need? An executive coach for your CEO? A coach to help build leadership skills for a new executive vice president? An executive coach to help you improve team performance, or a coach to help you develop high-potential employees? Your answer may impact your cost.
2. Skip Assessments and Analysis at Your Own Risk!
Performing some type of assessment at the beginning of a coaching engagement to get feedback on the executive is a best practice you should not dismiss. Don’t skip this step just to save money!
That said, leadership assessments range in style, purpose, and cost, so be sure to ask the coaching firm you are considering what assessment methodologies are available and what their recommendations are — and why.
For example, at Arden Coaching, we often use either the Leadership Circle Profile tool which is a quantitative 360-degree leadership assessment, or a 360-degree series of interviews which gives us a qualitative perspective. This information is then used by our client and our executive coach to create a development plan for use during the coaching engagement.
3. Demand Great Service in a Coaching Engagement
In addition to the qualifications and expertise of the coaching firm’s coaches and the various assessment tools available, once the coaching engagement begins, how much interaction will you have with the coaching firm?
We’re not talking about the coach/coachee sessions themselves. We’re talking about the degree to which the coaching firm will work with you and keep you up to date regarding establishing goals, updates about coachee progress, and tracking goals and deliverables.
Cheshire Cat: Where are you going?
Alice: Which way should I go?
Cheshire Cat: That depends on where you are going.
Alice: I don’t know.
Cheshire Cat: Then it doesn’t matter which way you go.
― Lewis Carroll, Alice in Wonderland
This is critical! How will you know if the investment you have made in coaching was worth it if you have not defined your goals and expectations? Where are you going? What does a successful coaching engagement look like to you? Your coaching firm needs to help you define your goals, track progress, and keep you informed throughout the coaching engagement. When you consider executive coaching cost, you will want to understand what the Return on Investment (ROI) is, and whether or not you achieved what you set out to accomplish.
4. The Duration of the Coaching Engagement
Executive coaching engagements typically range from three months to two years. For work on a specific area or a particular set of leadership skills, a six-to-nine-month engagement period is common.
Many CEOs and senior executives develop long-term relationships with their executive coaches as well. They find that the regular insight and perspective of an “outside” expert is extremely valuable to them. Perhaps it’s a monthly chat, a quarterly meeting, or an annual “check-up.” Whatever the timing, executive coaches can help keep CEOs and senior executives on track, resilient, and continually building and developing their leadership skills.
Take the Next Step
With these considerations in mind, you and your company will be ready to explore executive coaching options and make the best decision for your company, your leaders and emerging leaders, and your circumstances. To learn more about the cost of executive coaching, executive coaching, coaching options, and how it can help your organization compete and thrive, contact Arden Coaching at [email protected] or 646.684.3777.