What is SWOT analysis importance application HR management

SWOT analysis

SWOT analysis is a management tool that is based on internal (Strengths and Weaknesses) and external (Opportunities and Threats) factors to direct strategies, and can be used by HR.

There are different management tools that can be applied in search of improving results in a company, considering its different demands. Do you know how to apply SWOT analysis in people management?

It may be that you already know the SWOT analysis or matrix, but you are still not clear on how the Human Resources (HR) sector – or any other that wishes to do so – can use this instrument to optimize people management in the organizational context.

For you to have clarity on the subject, we are going to present the SWOT analysis focusing, above all, on understanding how the subjectivity that HR is used to dealing with is relevant to the successful use of the tool. Go ahead and happy reading!

What is SWOT analysis and why is it important?

SWOT analysis is a tool that allows the assessment of strengths and weaknesses, as well as existing opportunities and threats.

This explanation is usually aimed at the company as a whole, considering that the analysis carried out aims to direct strategic actions for the business.

Despite this, the concept of SWOT analysis can be applied to other scenarios, either by taking a cut in the context of the company itself – such as people management -, or even for making a personal decision.

SWOT is an acronym for Strengths, eaknesses , pportunities and T hreats which, in free translation into Portuguese, becomes Forces, pportunidades , Weaknesses and A menaces. And that’s why it’s common to talk about SWOT or SWOT analysis.

In English or Portuguese, Strengths and Weaknesses are internal characteristics while Opportunities and Threats are external characteristics. All of them can be listed for a more complete analysis and, consequently, better able to support the definition of strategic actions. Look:

  • Strength or Forces . _ It directs towards the identification of the company’s strengths that can be exploited to improve results or to achieve the goals set;
  • eaknesses or Weaknesses . It leads to the understanding of which are the weak points that the company needs to work on to reduce losses and improve its results;
  • The opportunities or The opportunities . Directs to the analysis of opportunities presented in the external scenario, considering the strengths and weaknesses of the company;
  • Threats or Threats It leads to the identification of problems that the company faces or may face in a project under development so that solutions are strategically thought out.

SWOT analysis or SWOT matrix analysis is important because it allows a company, one of its aspects or even a situation to be better known.

This happens through a simple and purposeful process, since this knowledge leads to the definition of an action plan that allows the reduction of risks and the increase of the chances of success.

The application of SWOT analysis in companies

Management tools are always welcome to ensure that a company makes better use of its resources, avoids losses, promotes improvements and achieves better results.

SWOT analysis is among the simplest yet efficient tools to be used by small, medium or large companies of any nature.

From the formulation of a business plan, through the definition of a marketing strategy, to the readjustment of the strategies of a sector. These are all examples of applications that SWOT analysis can have for a company.

In a more “crude” way, we can say that a good part of what involves decision-making can be based on the use of the SWOT matrix, also because it is a tool of simple application.

The list of factors of the SWOT analysis can be done in a common document, but the ideal for the correct use of the tool is to assemble a table. In this table, the different points related to Strengths, Weaknesses, Opportunities and Threats should be presented.

The use of SWOT analysis as a visual tool contributes to making it easier to relate internal factors to each other and to external factors. Something essential to ensure that different perspectives are considered in search of the most appropriate strategies according to the objectives and possibilities of the company.

This relationship between the factors is commonly presented as “cross SWOT”, a proposed deepening of the use of the tool that leads us to the importance of understanding the following:

  • Strengths x Opportunities ― this relationship aims to understand how the company’s strengths can be used to take advantage of the opportunities presented by the market;
  • Weaknesses x Opportunities ― this relationship seeks to understand how the company can correct its weaknesses so as not to miss opportunities presented by the market;
  • Strengths vs. Threats ― in turn, this relationship leads to a strategic understanding of how the company can use its strengths to minimize or circumvent threats in its market;
  • Weaknesses vs. Threats ― Finally, this relationship shows which weaknesses the company needs to eliminate in order not to be at the mercy of market threats.

Reflections on the application of SWOT analysis

Presented as it has been so far, the SWOT analysis can be received as a very positive, useful and effective tool. Something that may even be true, but that does not leave aside the need for some reflections to be made.

The application of this tool in any sector of the company, including HR or by HR, needs to consider some points so that its limitations are understood and do not become a problem. Let’s go to them:

  • Experts warn that the SWOT analysis is a very subjective tool and one of the issues that indicates this is the fact that the same factor can be seen as a Strength or a Weakness depending on the context.

A company that is looking to increase its market share may view the growing number of customers as a positive. But if you notice that customers don’t come back, you can understand that one-time sales don’t really represent the desired increase in market share.

The example given is intended to help you understand this dichotomy, but it is worth noting that HR, the focus of this conversation, is a sector already used to dealing with subjectivity precisely because it deals with people. Thus, you have a good chance of making more profitable use of the SWOT analysis;

  • There is a risk that the company will emphasize different factors listed for the SWOT analysis, based on its own interests. Therefore, it is important to maintain a critical sense and remember that the use of the tool aims to define strategic actions.

If HR or any other industry using the tool puts an exaggerated focus on strengths and opportunities, for example, it could end up underestimating the weight of weaknesses and risks for its action plan.

Likewise, if you focus too much on weaknesses and threats, you can miss Strengths and Opportunities that could be used strategically to generate better results;

  • SWOT analysis is a starting point tool. In other words, it does not indicate how to achieve goals or what actions should be taken.

Other than that, it only helps to identify factors that can influence the plans. Therefore, it may be necessary to associate it with other management tools to outline solid strategies based on the analysis carried out and on its most relevant factors.

How to bypass these limitations

For a more assertive application of the SWOT analysis, a strategy to circumvent the possible limitations of the tool is to assign weights to Strengths and Weaknesses.

Assigning weights is classifying each factor as more or less relevant to the objectives pursued by the company in each case of application of the SWOT analysis.

This increases the chances that subjectivity will be more clearly considered and that the tendency, albeit involuntary, to emphasize points of interest will be contained.

The effort to try to estimate which external factors are most likely to really influence the strategy to be designed by the company also contributes to the action plan.

The purpose of all this is to allow focus to be given to the main and most determining factors for the achievement of objectives. As a result, the company’s time and resources are better used.

SWOT analysis in people management

Now that you know what SWOT analysis is and how important it is, and understand that the tool can be applied with different objectives, let’s focus on people management and HR.

First of all, it must be said that using the tool, the Human Resources department needs to be clear about the company’s mission. By themselves, the internal factors of the SWOT analysis favor the understanding of what the organization is at that moment, but what it proposes to be should serve as a guide for this investigation and definition of strategies.

It is worth remembering, the mission of a company represents the reason for its existence, the reasons for which it was designed. At Tangerino, for example, the mission is “to strengthen the connection between companies and employees based on a culture of business prosperity”.

HR can use SWOT analysis to seek clarity on its own performance in terms of managing people, or it can, for example, seek answers to a specific question, such as high turnover . Here, we consider the broader analysis to follow up on the post.

Strengths and Weaknesses

Recruitment and selection, onboarding new hires, performance appraisal and employee development are some of the main responsibilities of a company’s HR and people management encompasses all of this.

The survey of internal factors can result in seemingly obvious points for the company, but their understanding becomes clearer when they are related through SWOT analysis.

HR can, for example, identify that the frequency of delays by the organization’s employees is high, as well as identify that the problem persists despite the existence of a delay tolerance policy. Something that indicates that the cause must be something else and needs to be discovered.

On the other hand, HR may find that it has a very solid selection and training process for new employees, but that the company is unable to ensure talent retention .

All these factors need to be punctuated so that the understanding of what the company is like is duly considered so that an adequate strategy can be designed based on its mission.

As highlighted, the SWOT analysis alone cannot direct which strategies should be adopted, but the identification of Strengths and Weaknesses is enough for HR to start defining its main starting points.

Opportunities and Threats

According to the SWOT analysis, internal factors should not be considered only separately from external factors. So, once HR is clear about the problems or qualities intrinsic to the company, it’s time to look outside.

The idea of ​​looking outside corresponds to understanding which external factors influence the HR sector in some way. It is interesting to clarify that when we talk about the market in the SWOT analysis, we do not just consider the competition.

The country’s economic situation can be a factor impacting the company as a whole and its HR more specifically. The same happens with changes in labor legislation ― which are frequently presented and commented on on Tangerino’s blog.

With these issues in mind, it is worth remembering that economics and legislation can have negative impacts, that is, present threats or have positive impacts, creating opportunities.

This understanding helps to reinforce the idea that the SWOT analysis is limited by subjectivity, but that this is something that a company’s HR is already or should be used to facing.

In addition, knowing the market according to competitive practices is also important for the SWOT analysis. The differentials that other companies present or not can serve as a parameter for issues such as talent retention or employer branding .


The SWOT analysis is a strategic tool and this presupposes that its conclusions must lead to actions that are appropriate to the company’s reality.

In this regard, it is necessary to remember the idea of ​​defining weights or adopting some other strategy to indicate which internal and external factors are most important for a proper analysis.

Furthermore, the mission, objectives and possibilities of the company must serve as a guideline for the design of the action plan. If the competition offers benefits that the company is not prepared to present to its employees and candidates, for example, certainly the focus needs to be different.

Although internal and external factors are related in the analysis, it is important not to forget that your company will hardly have the power to completely change the market.

For this reason, the use of the SWOT matrix tool should be based on the understanding that it is necessary to understand how to use Forces to respond to Opportunities or respond to Threats.

Likewise, one should seek to understand how to correct or eliminate Faults so as not to miss relevant Opportunities or succumb to Threats.

The relationship of SWOT analysis with other tools

This final reflection on the use of SWOT analysis in people management leads us to an issue mentioned elsewhere in the text: the possible need to use other management tools to complement the definition of a strategy.

SWOT analysis can, for example, help HR to identify problems that are represented by Weaknesses or that arise as a result of them. A safer way to design an action plan to correct these problems is to try to understand them as much as possible.

For this, it is possible to use the PDCA cycle or the Pareto Principle; tools that seek to identify the causes behind problems so that the study and adoption of solutions are more assertive.

Whether to deal with Weaknesses or to take advantage of Strengths, the planning of actions, their stages and those involved must be well done to optimize the time and resources invested. For that reason, association with a tool like 5W2H is recommended.

All this because, it is worth remembering, the SWOT analysis is a starting point tool and it is useless to use it if the sequence is not done in a structured way and based on some methodology that favors the achievement of results.

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