When trying to get a handle on creating a HR strategy, it can be hard to know where to start. That’s where an HR SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats, comes into play.
It’s an analysis that “is often used to define strategies,” said Erik van Vulpen, founder of the Academy to Innovate HR, and it is a useful tool that companies can use at the kick off to any strategy planning process, especially for HR.
“HR should have specific priorities. Otherwise, you don’t know what you’re supposed to do if you want to add value to the organization,” he said.
An HR SWOT analysis is typically run “very early on in your strategy process,” he added, and done in four parts: identify strengths, understand weaknesses, uncover opportunities and identify threats.
Here’s how those break down:
Identifying strengths
This is the fun part: Ask what your company is already doing well within the human resources department. “Maybe you’re very good at upskilling people. Maybe you have good internal processes to make sure people stay with you,” he said. These strengths are internal factors within HR that can help direct an organization’s goals.
Understand weaknesses
This part is perhaps less fun than identifying strengths, but just as, if not more, important, because weaknesses can’t be improved upon unless they’re out in the open. “We ask the question, ‘What can we improve in our HR organization?’” said van Vulpen, again focusing on internal issues. “Maybe you’re not so good at building a highly diverse culture and have a bit of a monoculture. That would be a weakness, for example,” he added.
Uncover opportunities
This is where looking outside of the organization starts coming into play: What are some of the trends happening in the marketplace that your organization could use to its advantage? An opportunity, for example, might be harnessing new technology, like AI, and incorporating it into a strategy plan.
Identify threats
On the flip side, what potentially harmful trends could impact the way HR does its job? Is there a new company entering the marketplace that will compete for the same talent and potentially try to poach people from you? Or is one of those emerging technologies poised to hurt your company instead of potentially helping? “By identifying them, you can start to come up with strategies to tackle them,” he said.
The scope of the SWOT analysis, and length of time spent on it, depends on each company. “You can make it as big or as small as you want,” said van Vulpen. “You can do it as a 10 minute exercise” or take as long as your organization or group thinks it needs. “The most important thing to realize is that a SWOT analysis is just the starting point of a broader strategy creation process,” he added. That can take six to eight weeks, or more.
Once a company has identified its strengths, weaknesses, opportunities and threats, “you can start to mix and match them,” he said, noting a company can use its HR strengths to neutralize an identified threat.
For example, if an HR group has a lot of experience doing M&A, and is very good at merging cultures during restructuring, then that strength could also be an opportunity as part of a business strategy to expand. “It’s a good time to acquire additional companies to be part of our organization,” he said.
Van Vulpen said it can sometimes be difficult to get HR professionals on board with doing a SWOT analysis, but he doesn’t think they should shy away from running this kind of exercise. If their stated goal is needing to hire more people, and keep people in the company from leaving, a SWOT analysis can help them figure out how to achieve that.
