The ROI of Integration Coaching for Middle Managers

Many companies provide limited integration support to middle managers as they transition into new roles. We regard the lack of investment here as a critical omission. After all, middle managers often have an outsized impact in determining whether or not an organization achieves its strategic goals. What’s more, the return on investment (ROI) of a well-designed integration program is exceedingly high. Here, we compute the ROI of integration coaching based on a representative scenario that we see with many of our clients. By doing so, we outline a business case that justifies greater investment in integration support for middle managers.

• Let’s say in a given year, a company has 100 middle managers moving into new roles. Titling differs across industries and organizations, but here, the middle managers might be directors, senior directors, associate vice presidents, and/or vice presidents. The 100 leaders include external hires along with those making transitions internally.
• Many sources have tried to quantify the cost of an unsuccessful transition at the middle-manager level, with estimates varying widely. Conservatively, let’s assume the cost of an unsuccessful transition to be 1.5 times the leader’s annual salary, which we’ll estimate to be $300,000. Using the estimates, the cost of a single unsuccessful transition is $450,000.
• Some indications suggest that roughly 50% of transitions at the middle-manager level are unsuccessful. Again, being conservative, let’s assume that the company in question has a success rate of 60%. With 40 out of 100 transitions being unsuccessful, the organization would incur a total annual cost of $18 million.
• RHR’s approach to integration coaching combines group learning with 1:1 follow-up and addresses six key areas: role clarity, culture fit, team effectiveness, stakeholder management, accelerated learning, and short-term wins. Based on our research, RHR integration coaching can dramatically increase the success rate for managers moving into new roles. Again, though, we’ll be conservative in our estimate, assuming that integration coaching elevates the company’s success rate from 60% to 70%.
• RHR integration coaching for middle managers typically costs around $5,000 per leader. Therefore, the overall price tag for a group of 100 leaders would be $500,000.
• Increasing the success rate by 10% would save the company an estimated $4.5 million annually. With a cost of $500,000 for integration support and a savings of $4.5 million, the ROI of integration coaching would be 900%.

With an estimated ROI of 900%, integration coaching gives HR and talent leaders an opportunity to create demonstrable impact for the enterprise.

—Michael Peterman