This HR SWOT analysis will provide us with complete information about the strengths, weaknesses, opportunities, and threats Human Resources faces.
Have you ever heard of a soccer team playing a season without a manager? Or a basketball team participating in the NBA without a coach? Probably not. The way a team can't play any sport in the absence of their coach; similarly, no organization can function without Human Resources. This HR SWOT analysis will provide us with complete information about the strengths, weaknesses, opportunities, and threats HR faces.
You must be thinking a sports fanatic is probably writing this article because apparently, the examples I gave had nothing to do with HR. But that's not the case; let me explain.
A coach's job is to manage, organize and recruit suitable players in a team to perform well. Likewise, In any organization, HR recruits employees and makes sure they perform to achieve the organizational goals.
Human resource (HR) is responsible for all the workforce-related operations in an organization. For example, If a company is running low on employees, its HR department will recruit suitable employees by conducting interviews and designing attractive salary packages.
HR also accounts for establishing a culture in the organization and solving the day-to-day problems of the employees. Before moving on to the HR SWOT analysis, let me explain what SWOT analysis is. You already know the acronym SWOT represents strengths, weaknesses, opportunities, and threats.
A SWOT analysis template gives a complete snapshot of internal and external factors that impact an organization, industry, or city, whatever is being analyzed.
You should know that strengths and weaknesses account for internal factors, whereas opportunities and threats represent external factors. To better understand it, I suggest you look at some of the SWOT analysis examples.
Now that you have the basic idea of the analysis, we can move forward towards the HR SWOT analysis. This analysis will help human resources in making better decisions. HR sets Long-term and short-term goals after reviewing their SWOT analysis. It will also help develop better HR strategies and models by overcoming the weaknesses and availing given opportunities.
Strengths of HR
Strengths of HR would be any factors that would result in an organization's growth since HR deals with the workforce, so any policy, activity, or strategy that makes the workforce more efficient and productive would be considered the strength of HR.
Low employee turnover rate
Employee turnover rate accounts for the number of employees leaving an organization in a certain period of time. A high employee turnover rate means that an organization fails to retain its employees for a longer time.
Keeping employees satisfied is a difficult job. There are several reasons why employees leave their jobs, such as poor communication, low compensation, poor management, etc.
Successful HR values their employees and looks for solutions to such problems. As a result, they succeed in keeping their employee turnover rate low.
Good compensation package
Besides all the other factors, an employee's eyes are always fixed on the money they are gonna get; I mean, we all want to live the American dream, right?
If HR manages to offer a handsome compensation package to its employees, then the productivity of the employees will likely increase, which will benefit the organization.
Cooperative HR
Do you know what the biggest worry is for an employee? To have a noncooperative HR.
Since HR has to be in contact with the workforce, they should have a very good relationship with the entire workforce.
A cooperative HR would make the employee happy. As a result, positive word of mouth will spread, improving the organization's image in the market.
Protection of employees' rights
For any employee, one of the biggest concerns is whether his/her rights will be protected at the working place or not. Unfortunately, employees face discrimination in many organizations because of their ethnicity, gender, religion, etc.
It is HR's responsibility to protect the rights of their employees at any cost. Ensuring that the rights of employees are protected will strengthen the relationship between employees and the organization, which will translate into higher productivity.
Use of technology in the operations
Today's era is considered the era of technology. Because of technological advancement, many tasks that used to be time-consuming are now carried out In a fraction of a second.
Similarly, if HR makes good use of technology in its operations, It will save a lot of time and increase the efficiency of the operations. An example of the use of technology in HR would be using recruitment websites to find employees.
Other than that, HR software helps manage day-to-day operations through automation and increases the organization's overall productivity.
Weaknesses of HR
Weaknesses in the SWOT analysis account for the internal factors which impact an organization negatively. It is never easy to highlight the weaknesses, but it is essential to do so to convert weaknesses into strengths or to mitigate them so they don't hinder progress.
Budget constraints
The primary purpose of HR is to allocate the available resources to get maximized results. Assuming there is a budget constraint, HR won't be able to carry out its operations properly.
Since HR is involved in workforce-related operations, lack of capital will restrict its operations of recruitment, appraisals, etc. This will cause demotivation and dissatisfaction among the employees, which will negatively affect the organization's performance.
Demotivated employees
Ideally, every organization wants its employees to be highly motivated and efficient, but often that's not the case. Employees that seem to be done with their lives and behave like a “Karen” are an actual challenge for HR.
Such employees can leave a negative impact on the organization's culture and spread demotivation among other employees as well.
Bad reputation
Having a bad reputation always gets you in trouble. If a company's reputation is dented and the word in the market about it is negative, then HR has to work super hard to get some good employees on board.
Like people don't want to befriend a person with a bad reputation; similarly, people don't want to get associated with companies with a bad reputation. A person looking for a job is always looking for job security. If an organization often has a reputation of laying off workers, it can be tough for HR to get competent and professional workers onboard.
Too much power can backfire
Imagine if an organization is a ship sailing in deep waters, HR would be its anchor. Since HR manages one of the significant factors of an organization's production and labor, HR has a lot of authority.
Such high authority can be misused easily if it is given to the wrong hands. HR, which fulfills personal motives by not considering merit, can cause significant damage to the organization.
Opportunities for HR to perform well
Technological advancement
HR can improve its operations by adopting new technologies which are now readily available in the market. Artificial intelligence can help carry out HR operations efficiently and productively.
For example, Using virtual reality for the training of employees has unlimited possibilities. Instead of exposing untrained employees to expensive machines, they could be trained on virtual machines. Using technology for HR purposes can provide an edge to the organization over its competitors.
Increase in the HR budget
HR is not involved in generating revenue; it only manages and distributes the funds allocated to HR. Therefore, a shortage of funds can create many problems for HR; on the other hand, an increase in the HR budget can provide an opportunity for HR to perform well and benefit the organization in the future.
An increase in the budget will enable HR to recruit skilled professionals who add value to the organization and play their part in its growth. Similarly, an increase in the funds will allow HR to raise the pay of employed workers to make them happy and get them motivated.
Increase in skilled labour
It is possible that due to the increasing number of educational institutes, the number of skilled labor present in the market increases. This would provide an excellent opportunity for HR to recruit skilled labor in its organization, contributing to its growth.
Evolving HR policies
New upcoming HR policies allow HR to increase productivity and perform well by adopting them. In addition, research is being carried out to explore new ways to maximize employees' satisfaction levels and increase productivity.
We can witness an example of a new HR policy in Toronto where a software company named Alida introduced a four-day week to get an increase in the level of productivity.
Threats for HR
The letter T of SWOT analysis represents threats any organization faces due to external factors. For example, threats for HR would be the external factors that can create problems for HR to function. Listing these threats is vital so that HR can make preparations to counter them.
Technology
You must be surprised to see technology in both strengths and threats, and no, it is not done by mistake. Instead, technology has both pros and cons.
We have earlier discussed how the usage of technology can help HR, but in this section, we will discuss the harmful effects of technology on HR.
As technological advancements are taking place, operations of HR are getting automated. However, this automation is limiting the role of HR since now artificial intelligence is taking the place of employees.
Increased demand for employees
If other companies start looking for employees for similar job positions, then such a situation can be assumed as a threat for HR.
Due to such a scenario, the competition would be increased, and HR would be forced to offer attractive compensation packages to get the desired employees onboard.
Similarly, there is a possibility that the employee turnover rate of the organization starts to increase as employees start joining other companies offering better pay packages.
Data privacy
There is an increased awareness of data privacy. However, every individual holds the right to data protection. This poses an immense challenge to HR as all their primary functions are related to managing the employees' sensitive personal data.
Being unable to comply with data privacy laws can result in heavy fines and a bad reputation for the company. For example, Meta was recently fined up to 17 million euros for a dozen data breaches.
HR SWOT analysis: Final Thoughts
This article started off by telling you the significance of HR in any organization. We also tried to give you some insight into HR by conducting an HR SWOT analysis.
With the help of a SWOT analysis, we discussed strengths, weaknesses, opportunities, and threats faced by HR. This SWOT analysis can be used by HR of different organizations to convert their weaknesses into strengths, avail the available opportunities, and prepare for the threats mentioned.
After reading this article, I am sure that now you are quite aware of the role of HR and the challenges it faces. But guess what? Besides all the information you've received, you have also learned how to do a SWOT analysis in no time!
Although this method of conducting a SWOT analysis is quite informative as both the external and internal factors are explained in detail, there's also another method through a SWOT table. SWOT analysis in this form is much easier to read and is less time-consuming to record.
