What is a S.W.O.T. analysis, and how does it apply to an HR department?

July 26, 2018
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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.

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