SWOT Analysis IN HR

 SWOT Analysis in HR

A S.W.O.T. analysis is a useful tool for developing your HR department’s strategic plan. Also referred to as the T.O.W.S. matrix, this method was developed under the leadership of Albert Humphrey at Stanford University.

S.W.O.T. is an acronym for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal factors; opportunities and threats are external factors. Analysis of these dimensions can be used to identify the HR department’s role in carrying out the organization’s mission.

To conduct a S.W.O.T. analysis, HR must first study and understand the organization’s mission, both the stated mission and any unstated agendas that the company leadership may have.

HR should then consider what strengths the HR department has that can be used to help lead the organization in the direction desired by the leadership team. Examples of strengths an HR department may possess include the following:

• A successful employment branding strategy.
• A competitive compensation philosophy.
• Effective turnover management.
• High safety standards.

In addition, HR should take an unflinching look at the department’s weaknesses. HR should consider department weaknesses, not only in comparison with other HR departments, but against the gold standard of the organization’s mission. A department that is performing as well as other HR departments on a given factor may still need to find ways to rise above the national averages for the organization to achieve success. Weaknesses could include things such as a bad reputation in the employment market, a benefits offering that insufficiently attracts and retains workers, or a lack of training resources.

To assess opportunities, scan the environment both within and outside the HR department. Opportunities that an HR department may find include new technology, unfulfilled needs of its internal customers and beneficial changes in employment laws.

Threats to an HR department may come from outside or within the organization. Examples of common threats to HR include increasingly stricter employment laws and litigious employees. Further, HR departments may need to overcome stereotypical negative views of the HR function.

The S.W.O.T. analysis should be more than simply listing items in each category. HR should consider the interaction of the S.W.O.T. analysis factors and establish strategies and tactics to maximize outcomes. What steps can be implemented to mitigate the effect that the department’s weaknesses may have on the threats the department faces? If the department pursues an identified opportunity, how will the department’s strengths and weaknesses affect the outcome? How can the department’s strengths be used to overcome the threats to lead the organization to achievement of its mission?

The outcomes of a S.W.O.T. analysis should be used to establish HR strategy and to ensure that the strategy aligns with the organization’s mission.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats. Occasionally, it may also be found as a ‘WOTS up’ analysis or the TOWS analysis. The technique is credited to Albert Humphrey who led a research project at Stanford University in the 1960s and 1970s using data from leading companies involved in long range planning processes.

A SWOT analysis is a planning tool used to understand key factors - strengths, weaknesses, opportunities, and threats - involved in a project or in an organisation. It involves stating the objective of the organisation or project and identifying the internal and external factors that are either supportive or unfavourable to achieving that objective. SWOT is often used as part of a strategic or planning process, but can be applied to help understand an organisation or a situation, and also for decision-making for many different scenarios.

The value of SWOT lies mainly in the fact that it offers self-assessment for management. The methodology has the advantage of being used as both a 'quick and dirty' tool or a comprehensive management tool, and that one (the quick) can lead to the other (the comprehensive). This flexibility is one of the factors that has contributed to its success.

However, while the elements can appear deceptively simple and easy to apply, experience shows that to do a SWOT analysis that’s both effective and meaningful, requires time and a significant resource. Deciding what the strengths and weaknesses of an organisation are, as well as assessing the impact and probability of opportunities and threats, is far more complex than first appears. It requires a team effort and can’t be done effectively by just one person.

Further, the inherent risk of making incorrect assumptions when assessing the SWOT elements can cause senior management to procrastinate when deciding between various strategic alternatives, frequently resulting in undesirable delays.

Carrying out and using a SWOT analysis is part of the core knowledge on enabling change in our new Profession Map.

A SWOT analysis process generates information that is helpful in matching an organisation or group’s goals, programs, and capacities to the environment in which it operates. The ‘SWOT’ itself is only a data capture exercise - the analysis follows later.

• Strengths: positive tangible and intangible attributes, internal to an organisation and within the organisation’s control
• Weaknesses: internal factors within an organisation’s control that detract from the organisation’s ability to attain the desired goal. Which areas might the organisation improve?
• Opportunities: external attractive factors that represent the reason for an organisation to exist and develop. What opportunities exist in the environment, which will propel the organisation? Identify them by their ‘time frames’.
• Threats: external factors beyond the organisation’s control which could place the organisation mission or operation at risk. The organisation may benefit by having contingency plans to address them if they should occur. Classify them by their severity and probability of occurrence.

It's important to note the strengths and weaknesses are intrinsic value-creating skills or assets, or the lack of these, relative to competitive forces. Opportunities and threats are external factors which are not created by the organisation, but emerge as a result of the competitive dynamics caused by future gaps in the market. PESTLE analysis is used to look at opportunities and threats (external) elements.

Doing a SWOT analysis can be very straight forward, but its strengths lie in its flexibility and experienced application.

• Decide how the information is to be collected and by whom (often a team approach is much more powerful than one person’s view).
• Identify appropriate sources of information.
• Gather the information - it's useful to use a template as the basis for exploring the factors and recording the information. See our practical and ready-to-use template below.
• Plot the findings.
• Identify the most important issues.
• Identify strategic options.
• Write a discussion document.
• Disseminate and discuss the findings.
• Decide which activities are a priority in the context of the organisation's goals and values – a possible action plan framework appears below.