SWOT: Threats

The fourth and final component of the SWOT analysis is threats. Like opportunities, threats are external factors that pose as a problem in the future for a company, but are not completely limited to external factors. Since threats are mainly external, only some can be in the control of the company and the remaining may naturally occur and cannot be changed with a company intervening. By using the SWOT analysis, companies can try to avoid threats and take the necessary actions to reduce any risk of threats against the company. Companies need to realize threats can leave the company in a very vulnerable state, which can affect the company’s overall performance. When developing the threats portion of a SWOT analysis, companies should consider the following questions (JRC European Commission, 2005-7):

• What obstacles do you [the company] face?
• What is your competition doing?
• Are the required specifications for your job, products or services changing?
• Is changing technology threatening your position?
• Do you have bad debt or cash-flow problems?
• Could any of your weaknesses seriously threaten your business?

By using the questions listed above, the human resource department can compile a list of possible threats towards the company. The next step would be to develop a plan to minimize the potential risk from any threats towards the company. The human resource department needs to act quickly in order to eliminate risk and avoid the company facing losses. HR may need to deal with threats such as (Travelers, 2013):

The human resource department should work with the risk management department to develop a plan of action to deal with each of the types of threats listed above. The more thought put into place for these plans will comfort employees and clients because they will know the company can bounce back quickly from them and they can continue to provide its products or services. Many of the threats above can have less exposure to risk if there are plans ready to be taken into account. HR should make sure their employees are trained to deal with scenarios dealing with each type of threat. Also, HR can use innovation to respond to threats, making them into opportunities for the company (Farazmand, 2004).

HR should also acknowledge the company’s employees can play a large factor in threats against the company. The intentions of employees can change depending on out of work factors, causing an employee to take action such as misconduct or robbery. Human resource should train employees about how to take proper reporting actions and make employees aware of the company’s policies and consequences with no tolerance behavior. The loyalty employees’ feel towards the company can impact their attitude about work and the overall company (Aghazadeh, 1999). This will help decrease any threats the employee may use against the company. If employees feel the company is loyal towards them they will return the loyalty and work hard and try to make the company better (Aghazadeh, 1999). As a way to decrease threats involving employees, HR can use benefits and welcoming working environments to make employees more comfortable and loyal towards the company (see blog post “SWOT: Opportunities” for more employee benefit ideas).

A huge threat, especially for smaller or local businesses, is globalization. As more and more companies are expanding globally it poses as a threat to companies that do not have the resources or finances to bring their company to that level. For companies whom have chosen to take on globalization, threats such as resistance to change need to be addressed. If employees resist the change, it will reflect in their work and become a threat to the company. HR needs to develop smooth plans and heavily assist employees as they learn, change, and adapt to the new cultural changes (Farazmand, 2004). New government regulations can threaten the way a company conducts business. HR should create educational modules or training sessions to teach employees about changes and provide guidance on how to change business practices (Farazmand, 2004).

Take away points:

While threats can increase the risk towards a company, human resource management can take the threats and transform them into opportunities for the company in some instances. On the other hand, many threats, such as natural disasters, are out of the control of HR, but can have minimal risk towards the company if a proper plan is established and implemented. It would be beneficial for HR to interview or survey employees regarding threats towards the company, as a way to find threats that need to be addressed or see if employees have techniques that can help minimize risk on threats for the company. By including the employees, they will feel the importance in company wide decision making and a sense of security the company is creating for them. HR should also use the questions mentioned above annually to reevaluate the company’s threats and see how threats are changing. They may be able to predict threats that have not happened or are farther in the future. The more planning established by HR and with the help of a risk management team, the better off the company would be if the threat is to take place. This could eliminate disruption to the business, and the safety of the company’s workforce will become less of a concern.

Resources:

Aghazadeh, Seyed-Mahmoud (1999). Human resource management: Issues and

challenges in the new millennium. Management Research News, 22(12), 19

32. 

Farazmand, Ali (2004). Innovation in strategic human resource management:

Building capacity in the age of globalization. Public Organization Review,

4(1), 3-24.

JRC European Commission (2005-7).

http://forlearn.jrc.ec.europa.eu/guide/4_methodology/meth_swot-

analysis.htm

Travelers (2013). Identifying business threats & risk management.

https://www.travelers.com/prepare-prevent/protect-your- 

business/business-continuity/identifying-threats.aspx

SWOT: Opportunities

The third component of the SWOT analysis is opportunities. Unlike the first two components (strengths and weaknesses) opportunities are external rather than internal. This means that the factors considered being opportunities are not controlled by the company and consist of analyzing outside sources. HR looks at factors such as the industry and markets for potential prospects, whether it is: market growth, business expansion, or internal strategies (Clardy, 2013). A company may be looking at competitors’ management styles or business strategies that they do not currently exercise. More specifically, the human resource department may assess a company’s opportunities as a way to satisfy more employees needs, discover new management strategies, and notice new methods when dealing with HR dilemmas. The following chart looks at the connection between a company’s strengths and weaknesses matched with their opportunities (Community Tool Box, 2013):

	Opportunities
Strengths	Use the company’s strengths to achieve opportunities
Weaknesses	Use opportunities to overcome the company’s weaknesses

Human resource departments can look at other companies’ departments as a way to find new opportunities to satisfy their own employees. This can be accomplished through creating a friendly, healthy, and welcoming work environment or culture and by offering unique benefits to employees. The human resource department can be creative by offering benefits such as paid vacation time, medical benefits, and offer health training classes or gym membership. Employees will see the unique offerings and may be drawn to the company. Using Google Corporation as an example, the HR team can develop an environment with everything at the fingertips for the employees. Google offers amenities and benefits such as (Google, 2013):

·      Large and colorful cafeterias

·      Gym facilities on location

·      Kitchens for employees to use

·      Educational classes

·      Gaming rooms

·      Travel opportunities

The company needs to look at the budget and variety of amenities it wants to offer its employees before trying to copy another company like Google. Google has such a large variety of amenities because they expect their employees to work longer hours, therefore giving them the convenience of everything within the company’s building. Google also wants to give employees the opportunity to interact with one another away from their work. When employees have close relationships they feel more comfortable in the work place and excel in their positions.

The culture of the company can cause employees to be uncomfortable in their work environment, therefore causing them to quit the company. Companies have the opportunity to change their work environments to adjust to the company’s culture and mission. The work environment starts with the basics such as the layout of the desks, offices, and cubicles. HR should look at how the company wants to be laid out and if the executives want to have private offices or be placed within the mix of desks and cubicles with lower level employees. The feeling of the higher-level employees earning their own office may be a perk to the position. But if they are mixed with the other employees, there may be a more open environment to the company.

The diversity within the workforce may also contribute to the company’s culture. Within the last two decades more and more human resource managements are increasing their workforce diversity as part of their overall strategy (Alcázar et al, 2013). If the company is a multinational corporation, hiring a diverse group of employees will allow the company to relate to clients all over the world and expose the employees to diversity as a way to better help them excel personally. When assisting clients, employees will be able to relate to them more if they know about the client’s culture, which can be discovered through a large pool of nationalities and ethnicities within the workplace.

With the opportunity of the culture, environment, and benefits offered to the employees, the satisfaction level will rise. If there are lots of amenities that cater to a wide range of employees, then employees will not complain that their interests or needs were not met. HR may want to consider creating a survey regarding the employee’s satisfaction and the culture of the employee annually to see where changes need to be made or if any employees have suggestions on additional opportunities the company should consider. A company wants to have high employee satisfaction in order to (Aghazadeh, 1999):

·      Decrease employee turnover rates

·      Increase employee loyalty

·      Have the company be even more successful

Take away points:

When it comes to the company’s culture and environment, HR needs to take the time to compare with other companies and discover new opportunities that will create a more stable and welcoming culture. Companies will notice through productivity levels and through their employees’ satisfaction levels if the culture is welcoming and comfortable for employees or if more changes need to be addressed. Employee satisfaction levels will reflect on their involvement in the company’s culture as well (Light, 2004). When the culture gives opportunities to individuals, whether it’s moving up the corporate ladder or being involved in important decisions, employees will feel they are of importance to the company. The company’s culture also should have a connection with their overall mission. Employees should feel comfortable and safe in the work environment. Companies can create a more diverse community within the company, which will expose employees to different situations dealing with nationalities and religions that may help them deal with conflicts, especially if the company is an international company. It is very important for the human resources department to continue to receive feedback from the employees to gather insight on the company’s culture and environment.

Lastly, HR needs to work closely with the employees to offer them a wide variety of unique benefits. Compensation is not always the top priority for employees regarding their benefits. HR has the opportunity to look at other companies when creating their benefits policy. If the human resources department can develop policies that can cater to their employees on a more personal level, then employees will appreciate the time and effort the company is putting into the policies. HR ought to realize that sometimes the simple satisfaction the employee receives from their job is enough of a benefit.

Source:

Aghazadeh, Seyed-Mahmoud. (1999). Human resource management: issues and

challenges in the new millennium. Management Research News, Vol. 22 (12),

19–32.

Clardy, Alan. (2013). Strengths vs. strong position: rethinking the nature of SWOT

analysis. Modern Management Science & Engineering, Vol. 1 (1), 100-122.

Community Tool Box. (2013). SWOT analysis: strengths, weaknesses, opportunities, and threats. http://ctb.ku.edu/en/table-of-contents/assessment/assessing

community-needs-and-resources/swot-analysis/main.

Google (2013). Benefits. http://www.google.com/about/jobs/lifeatgoogle/benefits/.

Light, J. N. (2004). The relationships and effects of employee involvement, employee

empowerment, and employee satisfaction by job-type in a large manufacturing

environment. (Ph.D., Capella University). ProQuest Dissertations and

Theses. (305041635).

SWOT: Weaknesses

The second component that makes up a SWOT analysis is the company’s weaknesses. Like the strengths component, weaknesses are the second internal factor magnified through the SWOT analysis. Weaknesses are the areas in the company that need attention for improvements. It’s important to focus on the organization’s weaknesses from the company’s viewpoint and from the customer’s point of view (Lee, 2000). By looking at a competitor’s strengths, a company will realize their weaknesses throughout the company and survey employees, asking where improvements need to be made. Although listing a company’s weaknesses is not ideal, once a list is compiled, the company will be able to tackle the weaknesses. By addressing weaknesses, the company can become more sufficient and more competitive in the market.

As mentioned in the “SWOT: Strengths” blog post, offshore outsourcing is becoming more popular. While there are many strengths to outsourcing around the world, weaknesses come with it as well. Using India outsourcing example, weaknesses that the human resources department may face include (Nair, 2004):

·      Lack of proper service and maintenance by government departments and agencies

·      Poor policy implementation

·      Poor business image

The human resource department of the IT company needs to realize they have to adjust to the new government departments and agencies. For a new company outsourcing in the area, they need to create a plan for the company to adapt to new regulations. Services and maintenance may not be up to the company’s previous expectations. Adjusting or resistance to change is a common weakness human resources face around the world, but developing and implementing an adjustment plan will make the employees more comfortable and the company will find outsourcing more beneficial (Okpara, 2008). This also leads into the second weakness listed above; poor policy implementation. The level of involvement of the HR department with policy implementation will be evident if it is a weakness. The HR department needs to work close with the employees and make sure to survey the employees on improving policy implementation and give insight to which policies they feel need enhancements. They also need to keep in mind when the right time will be to implement policies. One survey revealed, companies lack policies for employees with AIDS and other health related concerns (Okpara, 2008). The employees felt the HR department failed to train employees on how to deal with health concerns or offer services to help employees cope with these health concerns.

The final bullet above, “Poor business image,” can be broken into two areas: image of a business location and the overall image of the company. While one may not find the image of a business location to affect the company’s HR department, if employees are being transferred to a new location then HR will have to be involved in the process. Whether the location is within the same state or in a new country, HR needs to look at the image of the company’s new location and consider how comfortable employees will be there. HR needs to be ready to deal with language barriers, culture shock, and living situations if the company offers assistance. It will be up to the HR department to find qualified employees to transfer to the new location or recruit nearby. The second part of “poor business image” is the overall image of the company, more specifically for this example, how ethical the company is being presented to the public eye (Okpara, 2008). A weakness may include the negative aspects of a company, which are more apparent in the spot light through media and other sources. HR needs to be able to deal with the negativity and develop methods to distract or eliminate any unethical or negative publicity the company faces. This may be done through lining up an article highlighting the positive impact the company is making to the community or providing ways the company has changed from its past ways. Either way, HR wants to preserve the company’s image in a positive way. 

Once the weaknesses of the company are recognized, the next step for the human resource department is to develop a plan on how to manage the weaknesses. This is then followed by executing that plan. One way to manage a weakness is to develop a plan to improve it, whether it is a major change or a slight adjustment (Visser, 2005). This will create a positive out of a negative and be very beneficial in the future. For example, if an employee has weak telephone communication skills, the HR department can create a training session to improve his skills or find a new employee for that position and move the current employee to a better-suited position. If a company’s weakness is its more recent quarterly sales, they can further investigate areas that can improve sales. HR management can then create workshop programs and procedures to increase the skills and talents in that area to help the company. With that, it is important to realize human resource’s goals aligning with the company’s goals may not match up, causing a huge weakness to be apparent (Okpara, 2008). Through the SWOT analysis process, HR should meet regularly with executives and managers to address the goals of the company and each department to make help transform weaknesses into strengths that support everyone’s goals and improve the company overall.

Take away points:

The SWOT analysis gives companies the opportunity to pin point, improve, and transform weaknesses to positives. If a company dwells on the negatives then there is no way to move up from them. It could be beneficial to see how the company’s competitors see their strengths as a way to discover their own weaknesses. That being said, the HR department has the opportunity to run, analyze, and make adjustments to a company’s SWOT analysis. Routinely running a SWOT analysis will allow the HR department to see how changes throughout the company are being made and make adjustments for areas that are not being as sufficient as necessary. How to manage the company’s weaknesses falls onto the HR department as well. It is up to them to develop the necessary tools to eliminate the weaknesses. When looking at particular employee weaknesses, HR can pair employees who will balance one another or place the employee in a training program to help strengthen their skills. For a larger weakness that effects more of the company than just one individual, HR needs to create a series of steps that will not overwhelm the company all at once with the change.  Lastly, it is important to realize the human resources goals aligning with the company’s goals may not match up, causing a huge weakness to be apparent (Okpara, 2008). Through the SWOT analysis process, HR should meet regularly with executives and managers to address the goals of the company and each department to help transforms weaknesses into strengths that support everyone’s goals.

Resources:

Lee, S. F., & Andrew Sai On Ko. (2000). Building balanced scorecard with SWOT

              analysis, and implementing "Sun Tzu's the art of business management

              strategies" on QFD methodology. Managerial Auditing Journal, 15(1/2),

              68-76. 

Nair, K. G. K., & Prasad, P. N. (2004). Offshore outsourcing: A SWOT analysis of a

              state in India. Information Systems Management, 21(3), 34-40. 

Okpara, J. O., & Wynn, P. (2008). Human resource management practices in a

              transition economy. Management Research News, 31(1), 57-76.

Visser, Coert. (2005). Managing strengths in three steps. Managementsite.com 2013

September 27.

SWOT: Strengths

The first component of the SWOT analysis is strengths. Strengths can be broken down into many categories, such as: human capital, physical capital, tangible and non-tangible items. These are positive skills or factors that can allow a company to stand apart from their competitors and create value within the company. This leads to a very important strength a company can have within each department; competitive advantage. Specifically within an HR department, competitive advantage can be made up of well developed recruiting or training programs, ethics, compensation procedures, strategic planning, and mission statements to name a few broad categories. Human resources would use the SWOT analysis to identify the strengths in the follow areas (Nestor-Harper, 2013):

·      HR team members

·      Policies and procedures

·      Work environment, communication,

·      Impact on the organization

Acknowledging the strengths allows the HR management to create a welcoming environment for the company, productivity can rise, and the satisfaction of the employees can remain high, thus reducing employee turnover rates. The more strengths discovered throughout a company, the more options they have to complete successful projects by shuffling employees through positions that highlight their personal strengths. In the end, managing the strengths can place a company on a more profitable platform.

A great example of a strength that occurs through the human resource department uses offshore outsourcing. Especially now that more companies are going international, outsourcing is a great way to begin expanding a business. The IT industry is commonly known for outsourcing globally, especially in areas of India. HR management can research the strengths a company can gain when outsourcing. Strengths that can occur through outsourcing may include (Nair, 2004):

·      Low startup cost and wages

·      Adequacy of IT infrastructure

·      Higher quality of human resources

·      Positive attitudes of the government

With India’s economy, success is due to the software industry and is drawing more companies to use them as an outsourcing location. The government is encouraging and supportive to the IT industry, which is a great strength with a company developing and striving for success. The people are knowledgeable, generate quality services and products, and certain areas of India like Kerala, receive lower incomes compared to employees in the U.S. (Nair 2004). For U.S. companies, its more cost efficient to outsource and still have educated and qualified employees. The HR management of a company needs to maintain good communication in order for outsourcing to continue to be a strength and have strategic planning in place for the company to remain ethical and legal in all locations of operations. With today’s constantly improving technology, HR can easily communicate around the globe to other operations of a company and effectively make quick adjustments to an area as it is needed.

Leadership within human resource can contribute largely to the success and the strength of the department. HR leaders need to know how to lead employees through change quickly and effectively (Walker and Reif, 1999). Based on collected information from HR leaders and managers the following capabilities are strengths leaders should have (Walker and Reif, 1999):

·      Interacting with others

·      Manages conflict

·      Builds team effectiveness

·      Organizes work

·      Acts with integrity

 All these capabilities will lead to strengths within human resources, as they are able to establish a core group of employees to work effectively on projects. Interacting with others is very important whether it’s communicating orally or in writing. Maintaining a high level of integrity in all aspects of a business is a positive strength to have, as it will reflect on your business’ mission and values. It will help a company develop a good image and allow customers to return, as they will feel the integrity upheld throughout a company. I have personally experienced great leadership at my current position. The HR leader constantly checks in with me to make sure I’m satisfied with my position and wanted to make sure there are not any conflicts. She also makes sure my position description and goals are organized and clear. This has become a very important factor since I have had jobs in the past where my position expectations were unclear.

While every company may have a variety of strengths, human resources tend to be held accountable for managing the strengths of the company properly. Once the SWOT analysis is performed, HR will discover the talents and skill of its HR team members (Visser, 2005). This will allow the company to place each employee in an appropriate area of the company in order to increase the performance overall and allow the employee to excel on a personal level. Employees sometimes have difficulty managing their own strengths; this is where HR can help out. The HR members can use training programs or group stimulation activities to assist the company’s employees on developing their strengths and placing them with other employees to offset weaknesses or to create a stronger bond within a group of employees in order to help productivity (Visser, 2005). HR departments need to use training at all levels, even leadership and management positions. By using training programs, employees can learn to develop their strengths, discover new ones, and use their strengths in different ways (Vissor, 2005). I have taken personality tests for human resource departments once I have been through an interview. The HR department is looking for the kills and talents they can use to strengthen their company while allowing myself to discover my personal strengths.

Take away points:

It can be evident that many people shy away from putting the spotlight on all their strengths, especially during interviews as a way to avoid sounding too confident. There is a chance that we have yet to discover certain strengths as well. Strengths are always being developed and may be used at different times or with different projects (Visser, 2005). The timing when we notice our strengths can constantly change because each project or new work environment may bring out different or new strengths. The HR department may create opportunities for employees to help practice using their strengths with other employees and discover how to mesh strengths of all the employees together in order to create a successful working staff and company overall. Sometimes as younger employees we find HR activities to be boring, but they always contain a purpose for HR to help shape us as employees and/or employers for the future. Also, strengths come in different sizes. With the outsourcing example, it is easy to notice the strength of having part of a company’s operations in other areas of the world because of the great benefits produced from it. On a daily basis we may over look the strength in this type of scenario because we are still working in the U.S., but, in reality, outsourcing can create a huge competitive advantage within an industry. The leadership example may seem obvious, but it’s the skills and capabilities leaders have that creates business leadership as a strength for a company. The respect between the leaders and their employees will be evident if leaders have the mentioned strengths. In return, the company will see teams with higher productivity and the lasting impression on the company.

Resources:

Nair, K. G. K., & Prasad, P. N. (2004). Offshore outsourcing: A swot analysis of a state

in India. Information Systems Management, 21(3), 34-40.

Nestor-Harper, Mary. (2013). SWOT analysis for HR practices. Smallbusiness.com.

2013 September 27. 

Visser, Coert. (2005). Managing strengths in three steps. Managementsite.com 2013 September 27.

Walker, J. W., & Reif, W. E. (1999). Human resource leaders: Capability strengths and gaps. Human Resource Planning, 22(4), 21-32.

SWOT: Overview

This blog will provide a comprehensive overview of the SWOT analysis in connection to human resource management. Each blog entry will focus on one of the four aspects making the SWOT analysis (St. George Godfrey, 2013):

·      Strengths

·      Weaknesses

·      Opportunities

·      Threats

Also, each entry will be dedicated to how each aspect can be incorporated into HR management within different companies. The SWOT analysis is used, as a tool, by a company in order to plan for the future and see which areas of the company needs attention. A company can use SWOT analysis to evaluate a company overall or a particular department, such as human resource. Strengths of HR can be used to balance and enhance the department to become as efficient and profitable as possible (Nestor-Harper, 2013). The weaknesses allow the HR department to address struggling areas by using appropriate steps to eliminate them. The opportunities discovered through a SWOT analysis gives HR a platform to establish goals for the future and can create a plan to achieve these opportunities. Lastly, the threats found in a SWOT analysis can help the HR department to establish a plan to act against them to minimize any risks caused by threats. The SWOT analysis is a very beneficial tool to human resources. Benefits of applying a SWOT analysis include (Queensland Government, 2013):

·      Little or no cost

·      Improve business without external consultant or business adviser

·      Develop business goals and strategies

·      Concentrate on the most important factors affecting the business

Resources:

Nair, K. G. K., & Prasad, P. N. (2004). Offshore outsourcing: A swot analysis of a state

in India. Information Systems Management, 21(3), 34-40.

Nestor-Harper, Mary. (2013). SWOT analysis for HR practices. Smallbusiness.com.

2013 September 27.

Visser, Coert. (2005). Managing strengths in three steps. Managementsite.com 2013 September 27.

Queensland Government. (2013). Benefits and limitations of SWOT analysis.

www.business.qld.gov.au. 22 October 2013.

St. George Godfrey, Elli. (2013). Just what is a SWOT analysis anyway?

Abilitysuccessgrowth.com. 22 October 2013.

Walker, J. W., & Reif, W. E. (1999). Human resource leaders: Capability strengths and gaps. Human Resource Planning, 22(4), 21-32.