Contents Library

Human Resources Contents Library

Search topics

HR SWOT Analysis - eGuide


What is an HR SWOT Analysis?

HR SWOT analysis is a strategic human resource management tool used for business activities of present and future times’ organizational vision fulfillment roadmap for any organization. As the businesses have certain environments surrounding that is of both internal as well as external levels. SWOT Analysis is an acronym for strengths, weaknesses, opportunities, and threats analysis. Strengths and weaknesses are always the internal environments for an organization. Whereas the opportunities and threats are external factors. Others like political, economic, and societal arrangements surrounding an institution are external environments as well.

HR SWOT Analysis in detail

Following are the details about HR SWOT analysis:

1. Strengths

Strengths are the strong points or your selling points. This is something unique you have that your competitors don’t possess. In academic language, this is known as one of your USPs that is a Unique Selling Proposition. Strengths are particularly what you can do the best and others are unable to do so. It is what gives you a competitive advantage or an edge over your opponents in the business. This is a usual business axiom used by commercial cum academic strategists that: do not sell the things you can make, rather make the things you can sell!

Thereupon Strengths can be the specialized human resource you have working with you – which is the most inimitable capital for any business – as protocols, procedures, rules, regulations, policies, progressive factors and hi-tech can all be imitated, but on the contrary, human capital cannot be copied in terms of their skills, knowledge, abilities and especially the motivational selfless cornerstones where people put organizations first. Strengths come under the purview of the internal organizational environment.

2. Weaknesses

It is a well-known maxim that the problem identified is half solved. If a doctor does not know the ailment and/or the reason(s) behind it, they go for symptomatic treatments for a patient at stake! Although they advise the diagnostic tests for in-depth investigations for sake of knowledge of the particular disease(s) if any.

Similarly, like medical science, the HR staff being the people-management-scientists if are well versed with the weaknesses, it is easier to bridge the gaps known so far, therefore weaknesses never remain same as before.

The AFIs – Areas for Improvement – are the domain where progress can be made, provided that is truly known. The knowledge perfection for such a scenario is crucial in business setups.

Any poor performance on part of the production, sales, products itself or nay service provision lacking when is uncovered, is in a better position to be upgraded for and rectified.

What resource lacking is with your organization is yet another area for amendment for you to do. The disadvantages, limitations, or sales decline trends are the weaknesses.    

The aforementioned all come under the dominion of weaknesses but positively saying refinement overhaul. Weaknesses are the internal environment of any organization.

3. Opportunities

Opportunities are external in nature so far as the institutional environment is concerned. These are the areas where you may do the best. Any trend novelty or any of internal company strength can be converted into opportunities.

If there exist any market segments which are unserved by you or your competitor(s), that too can be an opportunity for you, if you want so and implement as required.

Anything outside in the market segments or even a niche – if you are the supplier for such a small but important market segment – where you may serve better, is your opportunity.

Opportunity cost is, on the other hand, can be within opportunities only if you choose an alternative bearing the losses for the other substitutes.

4. Threats

Threats are the strong points of your competitor(s) that anytime they may eat into your market shares. Threats exist in the organizational external environment.

Moreover, any of the weaknesses can also be converted into threats, if not stopped internally.

Nevertheless, political, social, and technological advancements and changes also pose threats for you if your business is not in line with the requisite market standards and/or legal policies governed by the states.

The risk factors are also threats indeed. Even lessening of the buying power, in general, is a threat to your business. Obstacles you face in your outside environment are too termed as threats.

Global pandemics are yet another threat to your business: like we all are faced amidst COVID-19 and are facing a post-pandemic situation until now, and no one can speculate for how long more!

Then how to do an HR SWOT Analysis to foster your business?

When you know what the strengths, weaknesses, opportunities, and threats are. Now is the question of key concern that how to build a human resources SWOT analysis and execute for doing business better!

WebHR experts are here with you as your professional partner(s), and yes that is too forever. The following steps, if truly followed in their letter and spirit, may resolve:

Strengths

When you know these, convert them into your opportunities and grab those opportunities along with others available for you as per your matching criteria.

  • Overcome your weaknesses and convert those into your strengths, like doctors treat ailments via medicines. 
  • Avoid threats and grasp the market opportunities. Those opportunities in market segments management have certain strategies to follow as far as HR SWOT analyses are concerned.
  • They are four such strategic viewpoints for finding novelty opportunities: market penetration (existing product/service and existing market but enter into the market with low price penetration – this is also known as low-cost leadership), market development (existing product/service but entering new markets to develop expansion, products/services development (existing market segments with new products/services introduction like NPDs – New Product Development), and diversification (entering into new market segments with novel products and/or services).   
  • If you fail to plan, you plan to fail is a famous management rule everyone knows. Therefore, plan which is SMART – Specific, Measurable, Attainable, Relevant and Realistic; and Time-bound. Therefore, plan as per your KSA Profiling – Knowledge Skills and Abilities – of your human resource. It is of utmost importance to know your lacking and strong points so that the focus can be right that what to do when, how, how much, where, and why – the 5 Ws be clearer to achieve the vision to be visionary.
  • If you want to be an employer of choice for top talent to attract, recruit and retain as your plus point against your competitor(s), you need to be smarter enough so far as your long-term goals are concerned and that is your strategic HR functionality.
  • The strategic HR functionality encompasses the HR operational side. The internal HR Strengths are to emphasize internal leadership enhancement. And internal leadership improves HR strategic development if focused on so.
  • Yet another strength to make is to focus upon your employee's knowledge of doing their jobs smartly, train them in technical as well as non-technical jobs, and in enhanced hi-tech software systems so that they work on tactical jobs eventually in favor of your organizational commitment towards mission and vision completion.

Weaknesses

Weaknesses pose a threat to HR endeavors to get successful results. As the HR department is not your production division and revenue section, therefore, cuts and curtails in financials are done upon dealt by HR domain too. And HR requires sound justifications for funding of activities. Therefore these things should be taken care of to deal with the unavoidable weaknesses.

However there are some avoidable weaknesses too, which being an HR strategic specialist – you can overcome - those are not financials but:

  • High turnover rates
  • Low morale of employees
  • HR requires to deal with the dissatisfied employee and make them satisfied and engaged to avoid prospect weaknesses

Opportunities

Opportunities are in HR SWOT analysis as well: when there is an increased demand for your products or services, HR should invest in human resource management and development activities.

  • Better to:
  • Give pay raises to existing employees
  • Hire more workers on employee referrals and from the community nearby,
  • Implement business development actions for company reputation, etc.     

Threats

Threats impact HR Strategies in HR SWOT Analysis. When your competitors gain a competitive advantage you are posed to the threat. This time HR and the industry as a whole may face losses or even closures. Your same industry or the other as substitute product or service may introduce threat for you. If the competitors offer better working conditions or boosted wage structures, you need to hire the best talent available as your worthy workforce as an HR Strategy and retain the same via improved wages.

As an HR Strategist for HR SWOT Analysis you should:

  • Conduct regular surveys,
  • Review wage structures,
  • Climate survey - employee opinion about the employer
  • Work as Strategic partnering advisor for the owners of the company
  • Bridge the gaps between the employee and the employer relationship management     

How to conduct HR SWOT Analysis?

Following are the steps to conduct HR SWOT Analysis:

  • Inter-departmental coordination to conduct brainstorming for SWOT
  • Brainstorm for how to take advantage of opportunities and strengths
  • Think tank to avoid threats and weaknesses conversion into strengths
  • Idealistic views gathering plans for next year - like a five-year plan, etc.

How to utilize HR SWOT Analysis?

The following steps are for the utilization of HR SWOT Analysis:

  • Identification of competitor’s analysis
  • AFI's recognition
  • Making sure for implementation
  • Identify strengths
  • Plan making for development and expansion

Wrap Up

To Wrap up HR SWOT Analysis goes hand in hand with several highlights as unavoidable correlates and they are mentioned below:

  • Payroll management administration
  • Wage structures review
  • Retention rates appraisal
  • Rules, policies, and regulations assessments from time to time
  • Identification and utilization of HR Data Analytics
  • Climatic survey taking – what employees think of the employer, emoluments, job conditions, work ethics, and job environments
  • Positive and negative impact and experiences feedback taking into account
  • OEF - Operational Efficiency Feedback learning from sister concerns
  • Format selection of HR SWOT Analysis write up by HR
  • Hypothesize the HR management and development philosophies as per the criteria mechanism of your vision strategy
  • Implementation of the selected strategies
  • Timeliness of data collection
  • Proper data analysis
  • HR Big Data Analytical Evaluation
  • Results measurements
  • Ethics characterization
  • Acceptance of faults of the systems: highlighting work-related short-comings and not the humans
  • Rectification of the wrong done, if needed