The SWOT analysis HR can serve as a structured planning method to evaluate the HR Business Model. The results of this method are the basis of a stronger, more competitive Business Model for HR to attract high potentials and deploy the right people at the right place in the right time. An HR department looks to the world of today and the future opportunities and describes the desired situation. The environment in which HR operates, exits of four areas. These are market forces, industry forces, key trends, and macroeconomic forces. For example economic recession makes that more people apply for a job. An aging workforce makes that more people retire and a knowledge drain will occur. This blog will apply the SWOT analysis to the (HR) Business Model Canvas.
Step 1: Identifying weaknesses, strengths, threats and opportunities – Group a flipchart, whiteboard or brown paper into four areas and assign to each of the surfaces an image that symbolizes weaknesses, strengths, and opportunities. Then identify through post-its which factors make that the HR Business Model is realized or which factors make that the realization stops. The HR Business Model Canvas consists of nine basic building blocks (value proposition, key activities, key partners, cost structure, resources, customer relationships, customer segments, revenue stream, and distribution channels), keep these in mind while identifying the factors. For a more detailed discription of these building blocks see my blog ‘Vision of HR Business Model Canvas‘. The strong and weak factors are part of the internal analysis. Regarding strengths may involve employees their knowledge and expertise. Regarding weaknesses may include low employee morale and high outflow. The opportunities and threats are part of the external analysis. Regarding opportunities may involve workforce growth, due to increased demand for a company’s products or services. Regarding threats may involve other company’s that offer better working conditions, wages or benefits to their employees and, therefore, recruit the best-qualified workers.
Step 2: Arrange weaknesses, strengths, opportunities, and threats – After post-its are placed in each of the individual squares, an arrangement has te be made. Without arrengement, there is the chance that the overview is lost and there are no connections to be recognized. Arrangement takes place by prioritizing the post-its. This concerns the relevance of (internal) customers (blue stickers) and distinguishing of competition (green sticker).
Step 3: Weigh issues – Subsequently, the weaknesses, strengths, threats and opportunities are compared with each other and combinations are made followed by a choice of the most important issues. For example, participants assign a score 1, 3 or 5 to a combination.
Step 4: Determine strategy – Finally, the strategy should be determined by asking strategic questions like: ‘How to use strength x in response to opportunity y?’, ‘How to use strength x to keep away threat y?’, ‘How to strengthen weakness x in response to opportunity y?’, and ‘How to strengthen weakness x to keep away threat y?’.
When writing this blog I was inspired by Wikipedia.
The above resulted in the paper ‘A business administration approach to HRM‘.
Don’t hesitate to comment and give me your feedback, suggestions and ideas are welcome too!