How Coaching Helps Employee Retention

Managers who have scheduled coaching sessions and are consistently asking questions will gain greater understanding and build greater trust with their employees.

One of the greatest challenges, and possibly the largest costs, facing organizations today is that of employee retention. In today’s recovering economy, employee retention has become an important issue for both small and large companies. If the bad economy taught us anything, it is that companies need to get more out of their employees and work even harder to retain them. Companies that want to retain their best talent and maintain productivity should focus their attention on engagement, loyalty, and job satisfaction. The manager who spends time coaching his or her employees ultimately is creating an engaging environment with those employees. Engaged employees and those who are recognized for their improved performance or progress are more likely to stay with the company. According to a study done by Teresa Amabile of Harvard Business School, the No. 1 motivator of employees today is NOT reward and recognition, but progress! This sense of progress that the employee feels cannot occur without the manager’s involvement.

Managers need to be aware that the way they interact with their people plays a big role in whether they choose to stay with the company or not. In fact, according to the Gallup organization, the No. 1 reason employees leave their companies today is related directly to their leader or manager. In addition, the Gallup organization reports 71 percent of employees today are either not engaged or actively disengaged at work. This means only 29 percent of employees are truly engaged in their work. Recently, one of my clients shared with me that after conducting an internal study, they found it cost their organization 1.5 times the employee’s salary to replace just one of them and get them up to speed through training. This does not include all the other incidental costs such as recruiting a replacement, work space, etc. Therefore, it is pertinent that they know how to coach their employees so they feel they are making progress and feel like a valued employee.

Coaching is a process of scheduled and consistent sessions that focus on employees’ strengths and areas of performance improvement. Coaching helps inspire and motivate employees to improve knowledge, increase skills, and change behaviors to drive greater performance in the workplace. Fundamentally, managers who have scheduled coaching sessions and are consistently asking questions will gain greater understanding and build greater trust with their employees. Not only does coaching build a trusting relationship, it will build a greater leadership brand and true understanding of the employees, who will develop an understanding of their leaders, as well.

Tips for Success

A successful coaching relationship is built upon employee engagement and employee trust. So how do we use coaching to help with employee retention? Here are a few ways for managers to retain employees:

  • Schedule coaching sessions with top-performing talent. This will maintain the engagement with them—they are the ones you don’t want to lose.
  • Schedule group coaching sessions. This will allow the whole team to feel they are a part of the process.
  • Utilize current employees to help retain talent. This is a powerful mechanism and can be done with them coaching one another. It will build and maintain a cooperative team environment.
  • Focus your efforts on positive reinforcement. This will build trust and mindshare to address the areas employees need to improve.

Who to Coach First?

Organizations today need to make sure that they are making an effort to retain their top talent and not ignoring them by assuming they are doing fine and don’t need any feedback. I often am asked by my clients, “Who should I coach first?” They assume I am going to tell them to coach the employees who are the most trouble, the least productive, or the ones who keep you up at night. Even though they do need coaching, if you put all your effort into coaching them, you risk losing your top performers. Your silence can be very LOUD to top talent. According to Scott Ahlstrand of Right Management, Inc., “Successful companies cultivate and retain top talent by building loyalty through engagement that connects employees’ work contributions to concrete business outcomes.” I highly suggest having regularly scheduled coaching sessions with your top performers to keep them engaged. In addition, underperforming talent can benefit greatly from the top performers’ guidance. This generates ongoing succession planning and future leadership opportunities. Retaining top talent saves money, reduces a leader’s stress level, and builds future leaders who know the organization.

Coaching Under Pressure

I recently was approached by a client who is a great guy but was in a tough situation and wanted to discuss it with me. He said, “We’re under unbelievable pressure to produce numbers; therefore, we find that we aren’t able to coach as we would like, but rather we demand that people produce results!”

I thought long and hard about my response as it really was not a question specific to coaching, but rather the pressures of their work environment. As I thought about it, something came to me. What if the manager was not engaged with this group, but later in the year needed to make such a demand of his or her team? Would there be buy-in from the employees? Is there a risk of them potentially feeling offended because the manager needs something from them but has not taken the time to engage with them and ask how their work was going? On the other hand, what if the manager was coaching and is truly engaging with them on a consistent basis? Would there be a greater likelihood that the employees would respond favorably to such a demanding request?

I shared this scenario with the rest of the group at my client’s site. Needless to say, they all saw that the coaching made all the difference with the employees’ loyalty. In addition, the manager who asked me the question smiled and nodded at me, thus showing his affirmation, as well. The old cliché, “You can’t go to the well too many times,” can be very risky for managers if they are not truly engaged with their employees! Managers today must take steps to engage with their top talent and keep them from leaving the company. One of the best ways a company can do this is by implementing a coaching program that ultimately creates a coaching environment where employees feel respected and valued while increasing productivity. In summary, managers and leaders need to ask themselves one vital question: Would my employees encourage or discourage possible candidates from joining my team? Most probably will not answer this honestly, but the question begins the process.

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Tim Hagen is president and chief coaching officer of The company’s Progress Coaching Training System helps develop managers into great coaches. Join the company’s blog at: Contact Hagen via e-mail:


Lorri Freifeld
Lorri Freifeld is the editor/publisher of Training magazine. She writes on a number of topics, including talent management, training technology, and leadership development. She spearheads two awards programs: the Training APEX Awards and Emerging Training Leaders. A writer/editor for the last 30 years, she has held editing positions at a variety of publications and holds a Master’s degree in journalism from New York University.