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Article: Using a SWOT Analysis to audit your business by Helen Reynolds

SWOT stands for ‘Strengths, Weaknesses, Opportunities and Threats’ and a SWOT analysis can help recruitment consultancies in several ways. Assessing these aspects of your set up should form part of your operational planning and is an effective way to examine performance and drive your business forward. So, where should you start?

First, decide who to involve in the analysis. Make sure you involve people at different levels in order to get a rounded opinion. You could think about even involving clients and candidates, as well as staff, before brainstorming ideas. When asking staff to identify SWOTs they should be anonymous in order to encourage absolute honesty. However, once you have your SWOT analysis, remember that it’s part of an ever evolving process and what’s a strength today may be a weakness tomorrow, so revisit your analysis regularly. 

When listing your SWOTs always give reasons why something is in each category, so when listing each one, ask the contributors to consider adding the phrase “which means that…” and then answering this. For example, one strength may be ‘sound finance’, which means that you have access to a variety of sources of credit.

So what sorts of issues should you consider?

Strengths – These are usually fairly easy to identify, through talking to your candidates and customers and looking at placement records. For most recruiters, there will be four categories that strengths fall into: sound finances, client base, staff skills and resources. Be aware, though, that highlighting strengths is often also a way of identifying weaknesses and threats – a manager could be highly organised but also too bureaucratic, or one of your company’s strengths may be a high biller who could be lured away by a great offer from a rival. 

Weaknesses – Many businesses know the areas where they are weak but tend to ignore them, so this analysis is a good way of dealing with any underperformance issues. Examples could be poor financial management, lack of marketing focus, employee weaknesses or inefficient use of time. 

Opportunities – Think about what is happening outside your own business which could lead to a new opportunity. Examples could include a change in an outside organisation or an individual’s circumstances that directly affects your business; perhaps the insolvency of a competitor or the chance to recruit an excellent headhunter from them? Or, it could also be a change in the general business environment, for example a shift in legislation or a new advance in technology, such as a new online candidate sourcing channel. 

Threats – Potential dangers to your operation are important to identify – they could be minor but they could also have devastating effects. Just as areas of strength and weakness are interchangeable, so are areas of opportunity and threat. A change involving an organisation or individual can be good, but also bad, news – a new competitor could emerge or you could lose a significant client. Developments in the wider business environment could also be detrimental. 

Once you have identified all these areas, think about how you can use this knowledge. Capitalise on opportunities that play to your strengths, address any areas of weakness and consider how you can protect your business against the possible threats and put together action plans to address the issues. 

Finally, make sure you can justify your conclusions, through placement records, data on competitors, market research or specialist consultants. You can then make sure your analysis is based on realistic information and can be used to maximum effect. 

Helen Reynolds is Managing Director of HB RIDA, a joint initiative between James Caan’s Hamilton Bradshaw Private Equity and The Recruitment Industry Development Agency. A business coach and entrepreneur she provides support to fledging and established businesses through a unique set of development programmes assisting recruitment business owners to grow and develop their own firms. You can contact Helen via 0203 086 9677 or helen@hbrida.com

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