3 Ways to Boost Talent Retention Through Coaching

Jul, 28, 2022

3 Ways to Boost Talent Retention Through Coaching

There are two major concerns that seem to be keeping leaders up at night right now. The first is the spectre of an economic downturn. The other is the impact of a tight jobs market on retaining top talent. Whilst the two issues are equally concerning, there is one important difference: business leaders can do little to change the global macroeconomy, but they can have a significant impact on what they do to hold on to their best people.

A recent McKinsey study revealed that feeling “valued by the organisation” is the single most important factor influencing employees’ decision to stay.

Coaching increases the feeling of being valued
Studies (including this one from Deloitte) repeatedly show the positive impact that coaching has on employee performance, wellbeing, work engagement and retention.

This positive impact is also very apparent in our work with our clients. One client, an ASX 20 company, is investing in developing the coaching skills of its leaders to support a culture of high-performance – and they have noticed a significant boost to retention: “Coaching has had a positive impact on our engagement survey results. What we are seeing is that as leaders better understand their colleagues through coaching conversations, there is also less attrition”.

“Coaching has had a positive impact on our engagement survey results… leaders better understand their colleagues… there is also less attrition.”

What drives such positive results?
The micro skills demonstrated by a skilled leader or external coach in a coaching conversation – such as active listening or empathetic questioning – deeply connect at a rational and emotional level. The process helps unlock the coachee’s full potential. When coaching is deployed effectively, it helps people feel understood, acknowledged and, importantly, valued.

However, deploying coaching well is both an art and a science. Without the proper rigor and discipline, coaching can be at best hit-or-miss – and at worst, can have a negative impact.

So what does an effective coaching deployment look like? There are three important domains of workplace coaching – one-on-one professional coaching, developing the leader-as-coach and peer-to-peer coaching groups.

If you’re using (or considering) coaching to invest in, and retain your high performers, we’ve created some guiding principles you should consider while building and maintaining your programs.

1) Professional one-on-one coaching  

Globally, there’s been a marked increase in organisations engaging with external providers of one-on-one coaching. The International Coaching Federation’s 2020 ‘Trends in coaching’ report shows an 11% growth in the number of coaches engaging with organisations. As the coaching marketplace continues to evolve through the adoption of digital technologies, coaching is becoming ubiquitous.

However, the challenge for organisations is to ensure coaching retains its impact—whether it is to improve individual effectiveness, or to retain top talent.

To ensure one-on-one coaching is effective and impactful, it’s important to:

  1. Provide a suitably credentialed coach and ensure the purpose of the coaching is well defined and has clear outcomes.
  2. Elicit the necessary support, input and feedback of the line manager and key stakeholders within the coachee’s immediate network.
  3. Ensure that coaching is framed as an investment in the professional development of the coachee: an opportunity to learn and grow both in their current role and to position them well for future career opportunities.
  4. Value the coach matching process. It’s critical for success that the coachee feels chemistry with their coach, enabling them to quickly build the vital trust and rapport which is the foundation of any successful coaching relationship.

2) The Leader as Coach

In the last decade we have seen a fundamental shift away from command-and-control leadership toward a leader-as-coach model in which managers facilitate problem solving and encourage the development of team members by asking questions and offering support and guidance.

A study by US based leadership consultancy, Zenger Folkman has shown that leaders who are good coaches had fewer employees who considered quitting. Under a manager perceived as an ineffective coach, more than 60 percent of employees considered quitting. By contrast, only 22% of workers reporting to high-quality leader-coaches considered resignation.

Organisational studies have associated an improvement in professional and personal skills with enhanced job satisfaction and willingness to commit to an organisation – the individual perceives they are valued by, and giving value to, the organisation.

To successfully develop the coaching skills of leaders in your organisation:

  1. Start at the top: Without leader-as-coach role models, coaching development initiatives don’t stick.
  2. Provide real-time observational feedback to leaders on their coaching skills. Help them find their signature strengths as well as their blind spots.
  3. Commit: Developing coaching skills requires time, discipline, practice and accountability. Provide a developmental pathway to help leaders go on the journey.

3) Peer-to-peer coaching

A study by Insider found that 71% of millennial workers want the workplace to become a ‘second family’. That’s important because millennials are the biggest age demographic in today’s workplace – and arguably the most difficult to retain. Peer-to-peer coaching is one of the ways organisations can harness their intrinsic desire for community and connection. Peer-to-peer coaching groups work because they are centred around professional growth, collaboration, trust and authenticity.

However, despite their effectiveness, peer-to-peer coaching groups can lose momentum quickly for two main reasons: where psychological safety is either not established early or is quickly broken through lack of structure, or if there is an absence of process to ensure the strongest personalities don’t dominate.

Support the formation of sustainable peer-to-peer coaching groups:

  1. Ensure there is a skilled facilitator in the group to establish, protect and sustain the psychological safety in the group and to keep the conversation focused.
  2. Maximise the relevance of the conversation by framing the conversations around real business challenges or opportunities relevant to the group. By doing so, it’s time “in the flow of work”, rather than time “out of work”.
  3. Create an environment for the free flow of knowledge-sharing.

Over 30 years of experience shows us that the implementation of these principles supports effective coaching programs. Organisations that focus on one-on-one coaching for top talent; developing the coaching skills of leaders; and facilitating peer-group coaching, can have a positive impact on employee performance, wellbeing, work engagement and retention.


Dr Elizabeth King, Consultant, SMG; Chris Goris, Senior Consultant, SMG; Dennyson Veloso, Intern, SMG.


Mehul Joshi
Mehul Joshi
Senior Partner and Head of Leadership Practice, SMG
Mehul is a former award-winning BBC journalist and is a featured writer on leadership for publications such as the Australian Financial Review.
Virginia Mansell
Virginia Mansell
Founding Partner, SMG
Virginia is an Organisational and Clinical Psychologist and founding Partner of SMG. With 35 years’ experience in the HR and professional development sector, she has been at the forefront of the executive coaching and leadership development profession, including working with many Australian blue-chip companies.


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