Who Pays for Coaching and Why?

findacoachIn most instances, leadership coaching fees are paid by the employer.  Many organizations view leadership coaching as an important form of professional development as well as a perk for retaining promising employees.  Since coaching is an ongoing vehicle for professional development, it is typically seen as having much more impact and value than other professional development activities, such as attending professional development conferences.   Many CEOs enlist a coach to work on areas that challenge them and also encourage members of their senior leadership teams to do the same.

However, there are several situations in which clients pay for coaching out of their own pocket. In organizations where coaching isn’t valued or is seen as a crutch, clients may not want their colleagues to know they are working with a leadership coach. Some clients want to keep their coaching confidential for other reasons, such as the avoiding the appearance that they need help to do their job or assuring that their coaching doesn’t become grist for the organization’s gossip mill. Others are reluctant to disclose their coaching because they may be utilizing it to explore how to deal with difficult bosses, co-workers or direct reports.  Fortunately, clients who pay for coaching can claim a tax deduction since coaching usually qualifies as an unreimbursed employee expense.

Many of my clients started paying out of pocket initially, but over time felt confident enough to inquire about their organization covering coaching fees as part of the client’s professional development activity. Ironically, in many of these cases it turned out that the organization was already paying for coaches for other employees. In more progressive organizations, of course, the assumption about coaching as a crutch is reversed — coaching is seen as a vehicle for helping someone who is already doing a great job do even better.

If you are applying a new position or are offered a promotion, make sure to ask about the organization’s support for coaching in your interview and negotiations. Most organizations are very concerned about attracting and retaining talented employees, and will often willingly add coaching as a professional development benefit for a new hire or promotion. Also ask about how coaches are selected. It’s very important for the client to choose his or her coach, since it builds commitment to the coaching process. At the same time, it can be appropriate and even desirable for a boss or human resources to review and approve the request as well as the client’s overall goals for coaching.

In a few cases, I’ve encountered human resources departments that utilize coaches pre-selected by the department or insist on selecting the coach for the client.  Avoid coaches selected for you by human resource departments — you need to do the choosing.  Their continuing relationship with human resources can compromise both their independence and ethical judgements as well as your confidentiality. As a result, issues discussed in your coaching sessions may be shared inappropriately with human resources personnel and perhaps your boss or co-workers. Only an independent leadership coach chosen by you can assure your confidentiality.

Also avoid utilizing the services of a coach who is already coaching your boss or your direct reports. While human resources departments often like the simplicity of hiring one coach for multiple employees, these multiple coaching relationships create very complicated ethical situations for a coach, even one who has the best of intentions. Always ask yourself this important question: Who is the client of the leadership coach? You? Your boss? Your board chair? The HR department? If this question has multiple answers, be wary of being coached by this person.

At the same time, it is legitimate for several coaches from the same coaching firm to be coaching peers in an organization, such as members of a senior leadership team. These coaches usually confer periodically to identify positive and negative trends regarding the organization’s climate and culture, and can provide valuable feedback to a CEO, president or board chair without violating the confidentiality of individual clients.