The Evolution of HR in Nepal
H uman Resource Management in Nepal emerged with the establishment of foreign joint venture banks in the mid-1980s and the arrival of multinational companies (MNCs) during the 1990s. This expertise subsequently transferred to Nepali enterprises, corporate entities, and organisations. Over time, HRM in Nepal evolved from administrative personnel management toward a more strategic role driving organisational success. However, this transition remains uneven, as persistent challenges like talent migration, skill shortages, low productivity, and rapid technology adoption continue to disrupt further growth.
Personnel administration: the roots of HR in Nepal
The history of modern HR in Nepal is closely associated with the development of formal organisations, particularly government institutions, public enterprises, banks, large industrial houses and multinational companies.
For much of the earlier period, what is currently termed HRM was primarily personnel administration. The function revolved around maintaining attendance, leave, payroll, disciplinary matters,
employee records, and enforcing labour regulations. Recruitment and hiring decisions within organisations rested strictly with senior management teams.
Consequently, the core emphasis was on managing employees rather than cultivating human capital. Scientific performance management, systematic training needs identification, and performance enhancement through
human resource optimisation were noticeably absent.
This distinction is important because the evolution of HR in Nepal did not originate with the adoption of HR technology. It began when organisations started recognising that employees were not merely an administrative expense, but a strategic asset whose knowledge, skills, motivation, and leadership could
A timeline of HR’s evolution in Nepal
Period Dominant HR orientation Major characteristics
Before 1990 Personnel administration Records, payroll, recruitment, discipline, compliance
1990–1999 Formal personnel management Liberalisation, private-sector expansion, structured policies
2000–2009 Professional HR HR departments, HR education, training, recruitment systems
2010–2015 Human capital management Talent, competencies, leadership, performance management
2016–2019 Strategic HR Engagement, culture, productivity, business alignment, digitalisation
2020–2022 Agile and resilient HR Remote work, flexibility, employee well-being, crisis management
2023–2025 Employee-centric strategic HR Experience, skills, culture, resilience, business transformation
2026 onward Tech-enabled, people-driven HR AI, analytics, automation, digital learning, human-centred leadership
directly drive organisational success. 1990s: liberalisation changes the workplace
Nepal’s economic liberalisation after 1990 fundamentally altered the environment in which organisations operated. The expansion of private-sector banking, insurance, manufacturing, telecommunications, hospitality, education, and other service industries increased competition, not only for market share but also for talent. “The regulated institutions have incorporated human resource management as a part of their corporate governance, where pay, promotions, and incentives are transparent,” said Vijaya Bahadur Shah, former CEO of Himalayan Everest Insurance, who worked with a multinational company in Nepal for a long period starting from the onset of liberalisation. “Employees can easily gauge their career progression based on their performance and agility at work.”
Along with the introduction of professional HRM in the country, workplace culture underwent significant transformation. Private-sector human resource management practices gathered momentum, accelerating the overall growth of companies and organisations.
Many organisations subsequently introduced professional recruitment, structured compensation systems, employee training, performance appraisals, career pathing, management development, and formal HR policies. Nepali corporate entities began infusing the HRM practices originally introduced
The primary distinction between pre-1990s personnel management and modern HRM lies in focus. Earlier practices centred on record-keeping, discipline, payroll, attendance, leave tracking, and enforcing labour regulations, with little regard for employee output. In contrast, modern HRM concentrates directly on nurturing individuals and empowering them to perform effectively.
2000s: professionalisation of HR The 2000s marked a pivotal phase in the professionalisation of HR in Nepal. HR education expanded as universities and management institutions began offering specialised programmes in HRM. Professional training and consulting services grew simultaneously. Consequently, organisations started adopting more systematic approaches toward recruitment, competency development, performance evaluation, compensation structuring, and organisational realignment.
Nepal’s academic institutions have produced thousands of Human Resource Management (HRM) professionals, experts, and researchers over the years.
Individuals educated through these institutions and trained in applied practices throughout their careers have established industry benchmarks, driven workplace innovation, and enriched academic discourse.
This was also the era when concepts like human capital, talent management, and organisational development became increasingly common across Nepal’s corporate landscape.
The key significance of this overall transition is that HR finally began to establish a distinct organisational identity of its own.
2010s: HR moves towards the strategic table
The next major shift was from HR as a support function to HR as a strategic function. Organisations increasingly recognised the connection between people and business outcomes. Recruitment was no longer simply about filling vacancies. Training was increasingly linked to core competencies. Performance appraisal began moving toward comprehensive performance management. Employee engagement, leadership development, organisational culture, and talent retention became central management concerns.
The nuance of HRM is to make people able to perform. The question gradually changed from “How do we manage employees?” to “How can people capability improve organisational performance?”
This was the period in which concepts such as strategic HRM,
