SWOT Analysis can Improve Employers’ HR Strategies
Employers tend to spend a lot of time strategizing ways to improve their products or services, or perhaps innovate new ones. Meanwhile, strategies for the human resources (HR) department may get devised and rolled out in a more haphazard or reactionary fashion.
Given the importance of strong hiring, onboarding and performance management practices in today’s employment environment, carefully planning your organization’s HR moves is highly advisable. One way to increase the likelihood that they’ll pay off is by first performing a strengths, weaknesses, opportunities and threats (SWOT) analysis.
Strengths and weaknesses
Generally, in the context of a SWOT analysis, strengths are competitive advantages or core competencies that generate value, such as a strong sales force or exceptional quality of products or services.
Conversely, weaknesses are factors that limit an organization’s performance. These are often revealed in comparison with competitors. Examples include a negative brand image because of a recent controversy or an inferior reputation for customer service.
However, you can apply a SWOT analysis to more specific aspects of your operations — including HR. Think about your HR department’s core competencies, such as:
- Filling open positions,
- Administering benefits, and
- Supporting employees with specific needs or those in crisis.
What does it do well and in what areas could it improve?
Opportunities and threats
The third and fourth factors in a SWOT analysis are opportunities and threats. Opportunities are favorable external conditions that could generate a worthwhile return if the organization acts on them. Threats are external factors that could inhibit operational performance or undermine strategic goals.
When differentiating strengths from opportunities, or weaknesses from threats, ask yourself whether something would be an issue if your organization didn’t exist. If the answer is yes, the issue is external and, therefore, an opportunity or threat. Examples include changes in demographics or government regulations.
Putting it to use
Your organization can benefit from applying a SWOT analysis to its HR initiatives in various ways. It all depends on the specific factors you identify.
Let’s say you determine, by benchmarking yourself against similar organizations, that “time to hire” is a strength. This typically means that your HR staff is skilled at placing targeted, effectively worded ads; working well with recruiters; and interacting in a timely, efficient and positive manner with applicants.
A strong hiring process is undoubtedly a competitive advantage. If hiring is a weakness, however, you could be headed toward an employment crisis if you lose too many employees — particularly coupled with the skilled labor shortages in some industries.
Opportunities and threats are important from an HR perspective as well. For example, if your organization decides to strengthen employee retention through expanded benefits, you’ll need to discuss the opportunities and challenges this will pose to your HR staff. By investing in their training and upskilling, you can strengthen HR competencies while providing a better benefits package to employees.
And, unfortunately, there’s no shortage of external threats. An aggressive competitor may begin poaching your employees, which will put added stress on your HR department. Evolving tax regulations and compliance requirements for health and retirement benefits can also catch HR staffs off-guard and put an employer in a precarious position. Watch out for regulatory changes in your industry, too.
Strategize carefully
Your HR department may seem to exist on an island with a somewhat different mission from your organization as a whole. But how it interacts with job candidates, helps manage employees’ performance and communicates about benefits — just to name a few things — has a huge impact on your success. Be sure to strategize carefully.
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