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L&D budgets remain tight but employers continue to invest in coaching, according to CIPD

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Seven in 10 employers have reported either increasing or stable expenditure on coaching, while under a quarter reported decreased expenditure, according to the CIPD.

The report from the CIPD, published yesterday, Coaching Climate, investigates how coaching and mentoring are developing in organisations.

This year 77% report coaching activity, compared to 90% in 2009. However, the coaching landscape is far from bleak with more than four-fifths of those using coaching reporting that they're doing more of it than two years ago.

Coaching is utilised most as a tool for improving performance and is used nearly as much to improve poor performance (43%) as to build on good performance (48%). Although line managers or in-house coaches deliver the bulk of coaching, the proportion by external coaches has nearly doubled (up from 14% to 20%).

When looking at the extent to which organisations work on specific agendas most coaching assignments were found to focus on developing skills and competence (67% always and frequently), with supporting career transition (54% always and frequently) another key area. The focus on improving understanding of business, commercial and financial issues (26% always and frequently) was low.

Coaching is continuing to develop within organisations despite budget cuts, although the type of coaching assignment is of greater importance. In a tough economic environment understanding business and commercial issues should be top of the list for HR professionals, however the report highlights just how low down on the agenda it actually is, with only 5% of organisations always doing this and 10% never addressing the issue.

Just under two-fifths of those surveyed record evaluation around 'stories and testimony' as the method most used (37%), compared to under a quarter in 2009 (23%).

Nearly three-quarters of respondent organisations have some sort of mentoring scheme in place (74%)

John McGurk, adviser learning and talent, CIPD, said: "The report demonstrates the value of coaching, and the need to use it to improve performance and build capability. It is good to see so many firms boosting their use of this important part of the learning and development toolkit.

"Although budgets remain tight it is encouraging to see that a relatively small number of organisations report decreases in their coaching budgets, compared to the number reporting decreases in overall funding in our Learning and Talent Development survey earlier this year.

"The report also identifies areas for improvement, particularly in the development of HR capability around business savvy, the ability to apply business knowledge and understanding to key people and performance issues and to fulfil strategic objectives. Our Next Generation HR research project challenged practitioners to develop and trade upon their insight within the organisation and link this to the business, driving real insight about how good people management can make the difference."