Total cost of ownership of executive coaching programmes

If ROI is the destination, total cost of ownership (TCO) is the road you take to get there. Without a clear, conservative TCO, payback and NPV maths are guesswork. This article sets out what to include—and how to capture it—so Finance accepts the numbers. For the full framework, see our pillar guide: How to measure ROI of executive coaching programmes.

1) Why TCO matters for coaching ROI

TCO means the full cost of owning and operating an initiative—not just the invoice price. See a plain‑English definition (Investopedia). In UK appraisal practice, decision quality improves when you consider all material costs and benefits and discount cash flows consistently; see HM Treasury’s Green Book.

2) What to include in TCO (direct and indirect)

Direct costs

• Coaching fees (programme, sessions, supervision).
• Assessment/licence fees (e.g., 360s, psychometrics).
• Enablement platform/tooling subscriptions (if used).

Indirect costs

• Internal time: leaders’ time in sessions, manager 1:1s, practice sessions, prep/admin.
• Travel/venue (if in‑person).
• Change/communications support, if material.
  
  

3) How to capture internal time credibly (and lightly)

• Use standard hourly values agreed with Finance (by role band); avoid bespoke rates.
• Sample rather than track everything: short timesheets for a representative subset, then extrapolate across the cohort.
• Count only incremental time (e.g., extra coaching cadence above BAU 1:1s).
• Document assumptions in one table and publish them with your dashboard.
  
  

4) Avoid double‑counting and leakage

• Separate valuation bridges (revenue, retention, time‑saved) so benefits are counted once.
• Keep a reconciliation from benefits → operating metrics (e.g., win rate, hours saved).
• Version metric definitions; when they change, reset baselines to keep comparisons fair.
  
  

5) A simple TCO calculator you can build in a sheet

• Inputs: cohort size; session count and length; hourly values by role; platform/licence fees; travel; comms; coaching fees.
• Auto‑calc internal time cost: (session hours + prep/admin + practice) × people × value per hour.
• Output: total TCO; cost per leader; cost per session; monthly cost profile for payback/NPV.
• Toggle: include/exclude in‑person travel to show scenario differences.
  
  

6) Worked example (directional)

Programme A: 16 leaders; 6 × 60‑minute sessions each; manager 1:1 cadence lifted by 2 per month. Coaching fees £48k; licences/platform £6k.

Internal time: leaders (6 hours + 3 hours practice/admin) × 16 × £70/hour ≈ £12,960; managers (extra 1:1s 2 × 30 minutes × 12 months) × 16 × £80/hour ≈ £15,360.

Illustrative TCO ≈ £48k + £6k + £12,960 + £15,360 = £82,320 (exclude travel). Publish the assumptions and invite Finance to adjust the hourly values to see sensitivity.

7) Governance and procurement hygiene

• Pre‑agree scope, deliverables and data needs with suppliers; capture cadence/quality rubrics early.
• Ensure data protection and confidentiality terms match your policies (DPA/ISO).
• Keep an audit trail of scope changes and how they affect costs/benefits.
  
  

References (inline)

Core definitions and guidance: Investopedia: Total Cost of Ownership | HM Treasury: The Green Book

Bottom Line

Q: What is total cost of ownership (TCO) for executive coaching programmes? (anchor id: #tco)

A: It’s the full cost to run the programme—direct fees plus indirect internal time and other costs—laid out over time for payback/NPV.

Q: What components should we include in TCO? (anchor id: #components)

A: Direct fees, assessment/licence costs, platforms, and indirect costs like internal time, travel and comms—counting only incremental time.

Q: How do we cost internal time without heavy admin? (anchor id: #timecosting)

A: Agree standard hourly values with Finance and sample a subset to estimate; extrapolate across the cohort and publish assumptions.

Q: How do we avoid errors or double‑counting? (anchor id: #accuracy)

A: Separate benefit bridges, reconcile to operating metrics, and version definitions; reset baselines if definitions change.

Q: What procurement and governance steps help? (anchor id: #procurement)

A: Pre‑agree data and cadence with suppliers, ensure DPA/ISO alignment, and keep an audit trail of scope changes and impacts.