Combining Coaching and Mentoring in Companies: Models, Contracts and Budget

Coaching and mentoring work best together in a company when each format gets a job of its own. Mentoring passes on experience, networks and the unwritten rules of the organisation. Coaching creates a confidential space in which a person develops their own solutions.

• Sequential: mentoring during onboarding, coaching later, for example in the first leadership role.
• Parallel: a peer mentoring circle for exchange, an external coach for personal leadership questions.
• Three-way contract: company, coachee and coach agree goals together; session content stays confidential (Art. 328b CO, FADP).
• Budget: mentoring costs mainly internal time, coaching mainly external fees. Both belong in fourth-quarter planning.
• Evaluation: set goals in advance and measure behaviour change, not just satisfaction.

Why do Swiss companies combine coaching and mentoring at all?

Swiss companies combine coaching and mentoring because the two formats close different gaps. A mentor answers the question "How do things work here?". A coach works on the question "How do I want to handle this?". If you offer only one of them, the other question stays open.

The basic distinction between the disciplines is covered in Coaching vs. Therapy vs. Counselling vs. Mentoring. This article takes the next step: how HR teams, management and coaches link both formats into one programme.

In Switzerland this is above all an SME question. According to the Federal Statistical Office, around 99.7 percent of market-economy companies had fewer than 250 employees in 2022, and almost two thirds of all employees worked in an SME (FSO). A business with 80 employees has no dedicated people development department. It has one HR person, a management team and a few experienced specialists who are happy to share what they know. That is exactly where a division of labour pays off: internal knowledge travels through mentoring, and personal development gets a protected setting with an external coach.

Research supports both formats, with different strengths:

• Mentoring: The meta-analysis by Eby, Allen, Evans, Ng and DuBois (2008) finds small but consistently positive associations with attitudes, behaviour and careers across youth, academic and workplace mentoring. Effects in the workplace were larger than in youth mentoring. Allen and colleagues (2004) show that mentoring is linked mainly to career satisfaction and less strongly to objective measures such as pay.
• Coaching: Theeboom, Beersma and van Vianen (2014) find positive effects on performance, well-being, coping, work attitudes and goal-directed self-regulation. Jones, Woods and Guillaume (2016) confirm a medium overall effect of workplace coaching on learning and performance outcomes.

In 1985 the mentoring researcher Kathy Kram described two functions of mentoring. Career functions include visibility, sponsorship and protection. Psychosocial functions include role modelling and acceptance. Coaching covers part of the psychosocial side, but hardly any of the career functions. An external coach cannot introduce you to the executive board. A mentor inside the company can. The reverse is also true: many people find it hard to tell someone from their own hierarchy that they doubt they are right for the role. This asymmetry is the real reason for combining the two.

Koopman, Englis, Ehrenhard and Groen (2021) point out that coaching and mentoring have a great deal in common and yet are usually researched separately. Inside companies it often looks the same. The mentoring programme belongs to HR, the coaching budget belongs to leadership development, and nobody plans the interface.

When does a sequential combination of mentoring and coaching make sense?

A sequential combination of mentoring and coaching makes sense when a person first needs orientation and only then can work on their own approach. Three situations are typical: joining a new company, moving from a specialist into a leadership role, and returning after a long absence.

Here is an example from an industrial SME in eastern Switzerland. A new project manager starts in March. For the first few months, an experienced colleague from another department mentors him. The mentor explains who really makes which decisions, how quotes are approved internally and which customers need special attention. After about six months the questions sound different: "How do I lead a team in which two people are older and more experienced than me?" Or: "How do I say no to the executive board?" A mentor from the same company is a poor choice for that. He is part of the system the project manager wants to talk about. Now an external coach takes over.

The six-month point is a rule of thumb from practice, not a research finding. The reason behind it is easy to follow: after half a year, a person knows the key processes, and the first conflicts have surfaced. Start coaching too early and the sessions get spent on questions a mentor could answer in five minutes.

For the handover to work, three things are needed:

• An agreed end to the mentoring assignment: the mentoring turns into a looser relationship, and everyone involved knows it.
• A separate goal for the coaching: the coachee, the line manager and the coach set it in a kick-off meeting. The topics from the mentoring are not simply passed on.
• No reporting line between mentor and coach: whatever the person wants to carry over from the mentoring, they bring themselves.

For SMEs this pattern stretches the budget: the external coaching only starts once there is a clear need.

When should mentoring and coaching run in parallel?

Mentoring and coaching should run in parallel when a person needs both exchange with peers and confidential one-to-one support at the same time. This applies above all to experienced managers, members of an executive board and specialists in key roles who have hardly anyone above them internally.

One proven pattern is the peer mentoring circle. Four to six managers from different departments or companies meet regularly and advise each other on real cases. Darwin and Palmer (2009) describe such circles as an alternative to the classic one-to-one pairing, which leaves many people out and does little to build collaboration. In Switzerland, these circles often form through industry associations, regional economic development agencies or leadership programmes at universities of applied sciences.

In parallel, the manager works with an external executive coach. The circle provides comparison, practical knowledge and a network. The coach provides a place for the questions you don't ask in the circle: doubts about your own suitability, a conflict with the board of directors, a private strain that spills over into work. What such an engagement costs in Switzerland and how it runs is explained in the article on executive coaching in Switzerland.

A second parallel format is reverse mentoring. Here a younger professional supports an experienced manager, for example on digital tools or on what younger employees expect. Wendy Murphy (2012) describes how the format encourages learning between generations while also bringing young employees closer to leadership topics. In coaching, the manager can then reflect on what the reverse mentoring stirs up. That is often more than either side expected.

Parallel formats need clear boundaries. If one topic is worked on in three settings at once, people soon end up discussing the same thing three times. A simple rule helps: the circle works on cases, the coach works on the person, and the reverse mentoring works on concrete knowledge.

Who should be a mentor and who should be a coach in a company?

A mentor in a company should be an experienced person outside the direct reporting line. A coach should be someone with solid coaching training and no authority over the coachee. That sounds obvious. In practice, the separation is still often broken, usually for budget reasons.

Three role conflicts come up again and again:

• The direct line manager as mentor or coach: someone who appraises, promotes and holds salary reviews can hardly offer confidential support. Good leadership includes coaching elements, but coaching does not replace it.
• The same person in both roles: a mentor who also acts as coach for the same person mixes advice with open-ended support. The person never knows which mode the conversation is in.
• An internal coach with a reporting duty: internal coaches can do excellent work. They do need a written rule that they report on content neither to the line nor to HR.

One finding by Jones, Woods and Guillaume (2016) surprises many people: in their meta-analysis, effects were stronger with internal coaches than with external ones. That is a weak argument against external coaches, because the number of studies was small and internal coaches often work with different target groups. It does show that closeness to the company need not be an obstacle, as long as the roles are kept cleanly apart.

A different standard applies to mentors. They don't need coaching training. They need experience, time and a short preparation: What is my role? When do I refer someone to HR or to a coach? In a sample of 1,162 employees, Ragins, Cotton and Miller (2000) found that satisfaction with the mentoring relationship explained more than whether the mentoring was formally organised or had developed informally. A formal programme is only as good as the individual pairs in it.

Coaches safeguard their quality through supervision and peer supervision. If you are in HR and selecting an external coach, ask about it. Why it counts is explained in the article on supervision and intervision in coaching.

How does the three-way contract between company, coachee and coach work?

The three-way contract between company, coachee and coach sets out who pays for the coaching, who has a say in the goals and what information flows between the three parties. Legally, the company usually concludes a mandate with the coach under Art. 394 et seq. of the Swiss Code of Obligations (CO, fedlex). The coachee is not a party to the contract, but is the person it is all about.

Two points follow from the law on mandates that many companies underestimate:

• Diligence and loyalty: the coach is liable for the faithful and diligent performance of the mandate (Art. 398 para. 2 CO). That loyalty is owed to the client, in other words the company. At the same time, the coach must not break confidentiality towards the coachee. The contract has to resolve this tension.
• Termination at any time: either party may revoke or terminate a mandate at any time (Art. 404 para. 1 CO). Terminating at an inopportune moment can, however, create liability for damages. So agree in advance what happens to sessions already paid for if the engagement ends early.

A good three-way contract consists of two documents. The framework contract between company and coach covers the fee, number of sessions, cancellations, data protection and termination. The goal agreement is drawn up in a three-way meeting, usually with the line manager. It records how everyone will recognise at the end that the coaching has made a difference.

The goal agreement should include:

• Two or three observable goals in everyday language, such as "runs team meetings so that everyone gets a say".
• The role of the line manager: present at the kick-off and the close, not at the sessions in between.
• The information flow: what does the company learn, in what form and when?
• The boundary with mentoring: if mentoring runs in parallel, the document states that mentor and coach do not exchange information.

With several coachees, a framework contract with individual call-offs is worthwhile. The company books a quota, and each coachee agrees their own goals with the coach and their manager. Which clauses a Swiss coaching contract needs in general is shown in the article on the coaching contract template for Switzerland.

What stays confidential in corporate coaching, and what may the company learn?

In corporate coaching, the content of the sessions stays confidential. As a rule, the company only learns whether the sessions took place and whether, from the coachee's point of view, the agreed goals were reached. Besides professional ethics, there is a legal basis for this boundary.

Art. 328b CO allows an employer to process data about employees only to the extent that it concerns their suitability for the job or is necessary for performing the employment contract. Notes about self-doubt, family conflicts or health strains have no place in a personnel file. The revised Federal Act on Data Protection sharpens the point: data on health is sensitive personal data (Art. 5 let. c FADP), and personal data may only be processed for a purpose that is recognisable to the person concerned (Art. 6 para. 3 FADP, fedlex).

For a combined programme, this creates a clear asymmetry:

• Mentoring is semi-public: HR may know who is mentoring whom, how often they meet and roughly which topics come up. Many programmes ask for a short interim report.
• Coaching is protected: HR knows the coach's name, the number of sessions and the outcome of the final review. Nothing more.
• Exceptions are in the contract: in the case of acute danger to self or others, the coach may depart from confidentiality. Writing this down in advance spares everyone a surprise.

For coaches, this also means: notes don't belong on a shared company drive, and sessions run on a video tool with clear data processing. Common traps such as unencrypted email or free tools are described in the article on data protection in coaching.

How do you plan the budget for coaching and mentoring in the fourth quarter?

You plan the budget for coaching and mentoring in the fourth quarter because many Swiss companies set their training budgets for the following year in autumn and release them in January. How this cycle works in detail is described in the article on B2B coaching for corporate clients. A combined programme adds one particularity: the two formats end up in different cost categories.

Mentoring costs mainly internal time, and that time never appears on an invoice. That is why it is often forgotten. A realistic mentoring budget includes:

• Mentors' working time for meetings, preparation and short follow-ups.
• An introductory workshop for mentors, often facilitated externally.
• Coordination for matching, kick-off, interim and closing meetings, usually handled by HR.
• A small closing event that shows mentors their effort has been noticed.

Coaching costs mainly external fees. Three planning rules help:

• Engagements rather than single hours: a package with a fixed number of sessions plus a three-way kick-off and close is easier to plan than an open pool of hours.
• Include VAT: coaches with annual turnover of CHF 100,000 or more must register for VAT and add the standard rate of 8.1 percent (FTA). Smaller coaches are often not registered. So always compare quotes gross.
• A pool for the unexpected: a manager hits a crisis, a team loses its lead. A small, unallocated coaching pool saves you a budget request in June.

Fees for individual coaching in a corporate setting vary widely by level, experience and region. Concrete ranges for leadership engagements can be found in the article on executive coaching prices. If you want to support a whole team, you plan with a different logic, as the article on team coaching in companies shows.

One budget item is almost always missing: evaluation. If you want to know at the end of the year whether the combination worked, plan the measurement in autumn. It costs little money, but it takes time for two short surveys and a closing conversation.

How does a coaching proposal differ from a mentoring programme concept?

A coaching proposal describes a service for individuals with a clear brief. A mentoring programme concept describes a structure the company runs itself. This decides who writes the document, who approves it and how it is judged.

A mentoring concept mainly answers organisational questions:

• Target group and purpose: who receives support, and which problem does the programme solve, such as resignations in the first year?
• Matching: by which criteria are pairs formed, and do participants have a say?
• Duration and rhythm: usually six to twelve months with a fixed minimum frequency.
• Mentor preparation: what do mentors need to know before they start?
• Governance: who coordinates, and who steps in when a pair isn't working?

A coaching proposal answers different questions:

• Starting point and goal in the company's language rather than in method jargon.
• Approach: number of sessions, rhythm, duration, format, three-way kick-off and close.
• Confidentiality: what flows back and what doesn't? A mentoring concept barely needs this section.
• Coach profile: training, experience with comparable engagements, supervision.
• Evidence of impact and fee: how will the company recognise the benefit, and what does the engagement cost gross?

A combined programme needs a third section that neither document usually has: the interfaces. When does someone move from mentoring to coaching? Who decides? How do you avoid mentor and coach giving contradictory advice? Coaches who supply this section unprompted stand out in a tender. They show that they have understood the client's programme.

How does a company measure whether combining coaching and mentoring works?

A company measures whether combining coaching and mentoring works by defining in advance what should change and checking it at several levels. A satisfaction survey shows whether participants liked the offering. It does not show whether it achieved anything.

The four-level logic of Donald and James Kirkpatrick (2006), originally developed for training, has proven useful:

• Reaction: how do mentees and coachees rate the offering? Ask briefly at the end of each phase.
• Learning: what have they newly understood? A self-assessment before and after is often enough.
• Behaviour: what are they doing differently day to day? The observable goals from the goal agreement and a conversation with the line manager help here.
• Results: what has changed for the company, for instance staff turnover or internal appointments to leadership roles? This is the hardest level, because many other factors play a part.

Coaching research shows why several levels make sense. Jones, Woods and Guillaume (2016) found the largest effects for individual-level and affective outcomes, and smaller ones for specific skills. A meta-analysis by Grassmann, Schölmerich and Schermuly (2020) also shows that the working alliance between coach and coachee is closely linked to the outcome. Inside a company, practice adds one more factor: support from the line manager. That point counts especially in a combined programme. If the line doesn't back the coaching, part of the effect fizzles out.

With mentoring, the effects in meta-analyses are small, so a single programme year says little. It is more informative to track the same indicators over two or three cohorts. A sober overview of the research on coaching can be found in the article Does coaching actually work?.

A word of caution on return-on-investment figures. Claims such as "coaching returns seven times the investment" usually come from surveys and rarely from controlled studies. Anyone who argues internally with such figures is easy to attack. A sturdier statement goes like this: we defined in advance what should change, and we can show whether it changed.

How do you position yourself as a coach alongside an internal mentoring programme?

As a coach, you position yourself alongside an internal mentoring programme best as a complement with a clearly named job. Many HR departments see coaching as an expensive version of mentoring. If you don't break that equation, you end up in a price comparison you can hardly win.

David Schmid, a business coach and L&D specialist in Zurich with seven years of practice, knows this situation well. A service-sector SME wanted to cut its coaching budget because the new mentoring programme was going well. In the conversation with the people development team, he did not quote studies. He described the questions that come up in his sessions:

"A mentor tells you how he did it. Coaching is about how you want to do it, even if that looks completely different. Once I put it that way, replacing coaching was off the table. We talked about the interface instead."

Since then, he brings a simple sketch to every first meeting with a company: mentoring on the left, coaching on the right, the transitions in the middle. The core of his work is autonomy. He does not hand out answers and does not represent any interest within the company. That independence is exactly what an internal programme cannot provide.

Four questions help in your first conversation with a company:

• What is already running? Ask about mentoring, onboarding or leadership programmes before you describe your offering.
• Where does the mentoring stop? Ask which topics the mentors deliberately leave alone. That is where your brief lies.
• Who is in the triangle? Clarify who the client is, who has a say in the goals and who approves the invoice.
• How will it be measured? Propose a simple evaluation yourself. It shows that results matter to you.

In multilingual companies, another layer comes in. Mentoring between Zurich and Lausanne, or coaching for a manager who has moved to Switzerland, changes the dynamic. Pointers can be found in the article on intercultural coaching in Switzerland.

How do companies and coaches find each other on bondigoo?

Companies and coaches find each other on bondigoo when HR staff or managers compare coach profiles and send a request directly. Each profile shows specialisms, training and languages. Coaches set their own prices, and payment runs through the platform's secure payment.

For a combined programme, this is useful in two cases. First, when an SME has no fixed pool of coaches and is looking for the right person for a single manager. In the bondigoo coach directory you can compare profiles calmly before a first conversation takes place. Second, when a coach wants to offer a fixed quota. Coaches on bondigoo can create packages with a set number of hours and their own price, including for a specific client. If you want to provide material between sessions, you can also build a structured coaching programme. How requests, booking and payment work is explained on the page How bondigoo works.

The platform does not replace the three-way contract or the goal agreement. It does take some of the organisation off everyone's hands, so that all involved can focus on what counts: a person growing in their role, and the company noticing the difference.

Sources

• Federal Statistical Office (FSO). Small and medium-sized enterprises. Data 2022 (STATENT).
• Swiss Code of Obligations (CO), SR 220, Art. 328b, Art. 394 et seq., Art. 398, Art. 404. fedlex.
• Federal Act on Data Protection (FADP), SR 235.1, Art. 5 and Art. 6. fedlex.
• Swiss Federal Tax Administration (FTA). Value added tax. Standard rate and turnover threshold.
• Eby, L. T., Allen, T. D., Evans, S. C., Ng, T. & DuBois, D. L. (2008). Does mentoring matter? A multidisciplinary meta-analysis comparing mentored and non-mentored individuals. Journal of Vocational Behavior, 72(2), 254-267. https://doi.org/10.1016/j.jvb.2007.04.005
• Allen, T. D., Eby, L. T., Poteet, M. L., Lentz, E. & Lima, L. (2004). Career benefits associated with mentoring for protégés: A meta-analysis. Journal of Applied Psychology, 89(1), 127-136.
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• Grassmann, C., Schölmerich, F. & Schermuly, C. C. (2020). The relationship between working alliance and client outcomes in coaching: A meta-analysis. Human Relations, 73(1), 35-58. https://doi.org/10.1177/0018726718819725
• Koopman, R., Englis, P. D., Ehrenhard, M. L. & Groen, A. (2021). The chronological development of coaching and mentoring: Side by side disciplines. International Journal of Evidence Based Coaching and Mentoring, 19(1), 137-151. https://doi.org/10.24384/3w69-k922
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