THE ROLE OF HR IN ORGANIZATION SUCCESS - THREATS & OPPORTUNITIES FOR HR TO PERFORM WELL

Threats & Opportunities for HR to Perform Well

Human resources (HR) is the department within a business that is responsible for all things worker-related. That includes recruiting, vetting, selecting, hiring, on boarding, training, promoting, paying, and firing employees and independent contractors.

Recruitment & selection, performance management, learning & development, succession planning, compensation and benefits, Human Resources Information Systems, and HR data and analytics are considered cornerstones of effective HRM.

 Opportunities for HR to perform well

One of the most significant external factors for HR is the opportunity for workforce growth, due to increased demand for the company’s products and services. More business translates into better raises or higher wages for current employees, along with growth for the surrounding community through the hiring of more workers. External factors also may present themselves as the company’s ability to land a highly successful rainmaker whose business development activities improve the company’s reputation or industry ranking

Technological advancement

HR can improve its operations by adopting new technologies which are now readily available in the market. Artificial intelligence can help carry out HR operations efficiently and productively.

For example, Using virtual reality for the training of employees has unlimited possibilities. Instead of exposing untrained employees to expensive machines, they could be trained on virtual machines. Using technology for HR purposes can provide an edge to the organization over its competitors.

Increase in the HR budget

HR is not involved in generating revenue; it only manages and distributes the funds allocated to HR. Therefore, a shortage of funds can create many problems for HR; on the other hand, an increase in the HR budget can provide an opportunity for HR to perform well and benefit the organization in the future.

An increase in the budget will enable HR to recruit skilled professionals who add value to the organization and play their part in its growth. Similarly, an increase in the funds will allow HR to raise the pay of employed workers to make them happy and get them motivated.

Increase in skilled labor

It is possible that due to the increasing number of educational institutes, the number of skilled labor present in the market increases. This would provide an excellent opportunity for HR to recruit skilled labor in its organization, contributing to its growth.

Evolving HR policies

New upcoming HR policies allow HR to increase productivity and perform well by adopting them. In addition, research is being carried out to explore new ways to maximize employees’ satisfaction levels and increase productivity.

We can witness an example of a new HR policy in Toronto where a software company named Alida introduced a four-day week to get an increase in the level of productivity.

 

Threats for HR

The letter T of SWOT analysis represents threats any organization faces due to external factors. For example, threats for HR would be the external factors that can create problems for HR to function. Listing these threats is vital so that HR can make preparations to counter them.

When a competitor gains an edge in the market share, it affects profitability and may result in layoffs, business slowdown or closure. Other types of external threats include businesses — not necessarily in the same industry — that offer better working conditions, wages or benefits to their employees and, therefore, recruit the best-qualified workers. HR departments can’t always insulate themselves from all external factors because some are imminent. However, HR can diminish the impact of external threats through conducting routine assessments of compensation structure, surveying employee opinion on working conditions and strengthening the employer-employee relationship through showing HR as a strategic business partner that values human capital.

Technology

You must be surprised to see technology in both strengths and threats, and no, it is not done by mistake. Instead, technology has both pros and cons.

We have earlier discussed how the usage of technology can help HR, but in this section, we will discuss the harmful effects of technology on HR. 

As technological advancements are taking place, operations of HR are getting automated. However, this automation is limiting the role of HR since now artificial intelligence is taking the place of employees.

Increased demand for employees

If other companies start looking for employees for similar job positions, then such a situation can be assumed as a threat for HR.

Due to such a scenario, the competition would be increased, and HR would be forced to offer attractive compensation packages to get the desired employees onboard.

Similarly, there is a possibility that the employee turnover rate of the organization starts to increase as employees start joining other companies offering better pay packages.

Data privacy

There is an increased awareness of data privacy. However, every individual holds the right to data protection. This poses an immense challenge to HR as all their primary functions are related to managing the employees’ sensitive personal data.

Being unable to comply with data privacy laws can result in heavy fines and a bad reputation for the company.

Human Resource Management (2022) Human Resource SWOT Analysis

https://hrmpractice.com/human-resource-swot-analysis/ 28.11.2022

WP Engine(2022) HR SWOT analysis: Why Human Resources Should Practice This Study https://pestleanalysis.com/hr-swot-analysis/ 28.11.2022

SHRM(2022) What is a S.W.O.T. analysis, and how does it apply to an HR department?

https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/what-is-a-swot-analysis.aspx     

 28.11.2022

Human Resources handbook (2022) SWOT Analysis (also in Human Resources) https://hrmhandbook.com/hra/swot/  28.11,2022