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August 25, 2021 | HR Compliance | Posted by Ascentis Thought Leadership

HR SWOT Analysis

A human resources (HR) SWOT analysis is a process of collecting and analyzing data to answer critical questions about an organization and how to manage a workforce. This analysis allows business owners to understand what drives the business and what kind of decisions are going to help the company moving forward.

HR SWOT analysis is one of the most common types of HR analysis. SWOT stands for Strength, Weakness, Opportunity, and Threat. The idea is to identify what fits into each of these categories for your business. What are your strengths and weaknesses? What factors present an opportunity for your business, and what presents a threat? With HR SWOT analysis and HR solutions software, business owners can make informed decisions that will help their businesses grow and their employees thrive.

If you’re still confused about what a SWOT analysis for HR department is or how it can help your business succeed, keep reading to learn everything you need to know about SWOT analysis and your business.

What is a strength, weakness, opportunity, and threat (SWOT) analysis?

A SWOT analysis is a planning technique that allows businesses, individuals, or departments to identify strengths, weaknesses, opportunities, and threats related to their business. Below, we’ll dive into each component of SWOT and how it can relate to your HR department.

SWOT Matrix that lists strengths, weaknesses, opportunities, and threats.


Understanding what your business does well is an important part of running a successful business, which is why it’s the first part of SWOT analysis. You want to look at the things that are going right with your business, whether you have low turnover rates, excellent customer service, or your employees feel like they’re compensated well and have good benefits. These strengths set your business apart.

Once you identify your strengths, you can use them to help take advantage of opportunities that allow you to grow your business. Understanding how to keep employees happy and what you do well as a company allows you to play to those strengths and work on the things you’re not good at.

For HR departments, the strengths found in an HR SWOT analysis can take many forms. For example, strengths can be a strong history of compliance, streamlined staff onboarding, or generous employee benefits.


As important as your strengths are, identifying weaknesses is an equally significant part of a human resources SWOT analysis. Weaknesses are an internal factor just like strengths, except your weaknesses are what hold your company back from becoming what it could truly be. It’s important to recognize what you do poorly as a company, whether you have trouble with marketing, employee retention rates, or payroll, for example.

Working to improve upon your weaknesses is a big part of growing as a company. With payroll compliance software, you can make sure you’re not making any payroll mistakes. Taking advantage of tools that allow you to overcome your weaknesses is an important part of running a successful company and human resources department.


Opportunities are an external factor that you can’t necessarily control, but you can control how you react to them. Your HR SWOT analysis should include areas where your business can take advantage of opportunities to succeed. Being prepared for opportunities that come your way allows you to make the most of every opportunity, which is a crucial part of success in the business world.

Examples of opportunities include things like positive media coverage, a spike in demand for the product or service you offer, or a law or regulation that may positively affect your business. The more you can take advantage of these opportunities, the better off your business will be. In an HR department, opportunities might be new compliance regulations, new job roles to hire skilled staff, or automated software that can streamline mundane, costly, or time-consuming tasks.


Threats are also an external factor and an important part of HR SWOT analysis. A threat is anything that has the potential to negatively impact your business. Just like opportunities, threats are something you can’t prevent, but you can control how you react to a threat. Identifying threats early on helps you stay prepared for a broader range of situations.

Threats can be anything from a natural disaster that causes damage to your business to a loss of skilled labor. These threats can affect businesses of any size, so identifying the threats that could potentially affect your business is important. Examples of threats in an HR SWOT analysis might be an economic shutdown that requires laying off employees, new regulations that redefine job roles, or competitors with larger budgets to hire trained staff.

How to conduct a SWOT analysis

While a mobile HR app can take some of the struggles out of HR analysis, SWOT analysis isn’t as simple as it may seem. You can’t just take a guess at what your strengths and weaknesses are as a business; you need to back your SWOT analysis up with real data that you can take action on. You also need to understand how to use the data you extract from an HR SWOT analysis to increase business success.

In order to conduct a SWOT analysis, you need to lay out a SWOT matrix that includes four categories: strengths, weaknesses, opportunities, and threats. Once you’ve done that, you can use data to figure out what your strengths and weaknesses are as a business. You don’t know if your marketing campaign is successful without analyzing it, so look at key performance indicators to determine your company’s performance in various areas.

Graphic that lists the steps on how to conduct an HR SWOT Analysis, such as brainstorming strengths, weaknesses, opportunities, and threats and creating a strategic plan.

Investors and SWOT analysts can help you identify strengths and weaknesses as well as opportunities and threats. Being thorough is important when conducting an HR SWOT analysis, so make sure you do plenty of research and use data to make informed decisions that can help your business grow and succeed.

How to use a SWOT analysis

Writing a SWOT analysis is one thing, but you have to figure out how to use that SWOT analysis as well. A SWOT analysis for HR and payroll can only take you so far if you don’t find ways to take action based on the data you collect.

Uses of a SWOT Analysis include determining what competitors are doing well, identifying areas for improvement, ensuring compliance, recognizing strengths, and creating a plan for growth and improvement.

Once you’ve completed a SWOT matrix and identified all of your strengths and weaknesses, you can start asking the important questions that help you decide which actions to take. For example, you need to figure out how to use your strengths to continue growing and succeeding as a company. On the other hand, you need to identify ways that you can improve on your weaknesses, so they aren’t negatively affecting your business.

As far as opportunities go, you should be looking for opportunities that your company can take advantage of and determining the best way to apply them to different areas of your business. If there are any threats to your business, making a plan in advance can save you time and money if that threat becomes a reality down the road.

How do you write a good SWOT analysis?

While the US Economic Development Administration offers a helpful guide for writing a good SWOT analysis, it can be tough to figure out exactly what you’re supposed to be looking for. Every good HR SWOT analysis starts with asking questions about your company for each category of SWOT. Is your company good at managing payroll? Do you have high employee retention rates? What would happen if new laws or regulations were passed and you are no longer compliant?

Once you know what questions you want to answer, you can use data and analytics to answer those questions. You don’t want to assume you’re good at retaining employees; you want to look at data that shows employees have positive experiences with your company.

As far as format goes, you can write a SWOT analysis using the SWOT matrix, a list, or even in paragraph form. The important thing is being thorough when it comes to SWOT analysis for the payroll department and HR.

To write a good SWOT analysis, choose the right format, such as a SWOT Matrix, fill in each section, use data to provide evidence and insights, and hypothesize solutions to threats and weaknesses.

SWOT analysis example

If you’re still having trouble understanding HR SWOT analysis and how it applies to your business, here’s a quick example.

Let’s say you’re writing a SWOT analysis for XYZ Construction, a construction company with a large team of workers spread across multiple projects throughout the Northeast. You might start by asking questions about the strengths and weaknesses of the company. Does XYZ Construction meet deadlines consistently? Are employees compensated well? Is XYZ Construction paying the right amount of taxes based on where employees are doing the work? If deadlines are consistently met and employees feel they’re compensated well, those are strengths. However, customers calling to have something fixed shortly after a job is completed indicates a weakness.

Since the company is working on several projects, a work truck breaking down could be a potential threat. Rising material costs are always a threat to construction companies, too. However, serving a large area and working on several projects creates opportunities for growing the company through referrals.

Using this information, you can work to strengthen your company, highlight your strengths, prepare for threats and take advantage of opportunities.

Wrapping up: SWOT analysis explained

Just like software that lets you track time and attendance, HR SWOT analysis is an important part of running a successful business. SWOT analysis allows you to identify key strengths and weaknesses of your business, which you can use to maximize your success. By preparing your company against threats and taking advantage of potential opportunities, you can also grow your business through SWOT analysis.

At Ascentis, we offer a wide range of services and support that helps companies with HR solutions make the most out of their business. We can help you grow your business, stay in compliance, and take care of HR and staffing issues with our HCM software.

With more than 35 years of experience in providing Software as a Service (SaaS) solutions, Ascentis thought leaders have become a respected source for insights, tips, and innovations in the Human Capital Management (HCM) space.