Have you ever heard of a SWOT (strengths, weaknesses, opportunities, threats) analysis? If you have, the idea of environmental scanning will already be familiar to you. If not, it essentially is referring to the process of reviewing and analyzing the internal and external factors and trends that may affect your current and future actions.
As the name implies, the goal is to scan the environment, which includes the general working environment (the industry, the economy, etc.), the competitive landscape, and the internal environment. This type of scan can be conducted by nearly every department within an organization, including HR.
From an HR perspective, this would include assessing things like:
- What is going on with the world and the economies of areas where you operate? How will these trends affect your organization? How will they impact HR decisions? For example:
- What is the unemployment rate?
- What laws are changing that will affect your business? Are there other political concerns that will affect your business?
- In your local areas of operation, what trends are you seeing that will impact the organization?
- What is going on in your industry, specifically? Is it growing? Where is your organization placed in the industry?
- Where does your organization fit when competing for talent? How scarce is talent right now?
- Are there technological trends that will impact your HR needs?
- What skills does your organization need to be competitive? Do your employees currently have these skills or what training (or hiring) will be needed?
- What trends are happening in the industry? Does your organization make trends or follow them? What changes will you have to make to remain competitive when it comes to attracting and retaining talent?
- Who are your direct competitors? How are they changing? Who is new to the picture?
- How does your compensation and benefit structure compare to those organizations with whom you’re competing for talent? What changes might be needed to continue to attract and retain talent?
- From a company perspective, what is going on in the organization?
- What are the company’s strengths and weaknesses? How do these items affect HR directly? What can HR management do to address the weaknesses or capitalize on the strengths?
- What trends are you seeing that will impact HR in the next year, next 5 years, and next 10 years? What can you do to prepare?
Clearly, gathering this type of information is often easier said than done. Thankfully, there are a lot of sources that can be utilized to assist. There are third-party groups that offer competitive information, for example. There are publications that provide information as well.
The key is to ensure that the members of the HR management team are being proactive in scanning the environment in which they’re operating—doing so will allow them to take steps to be better prepared for the future. Less reacting, more planning and preparing.