H aving worked through different stages of the HR profession in Nepal, I have witnessed its evolution across four distinct eras: (a) Personnel Administration, (b) Institutionalisation of HR, (c) Strategic HR, and (d) the current Digital and People & Culture era.
Personnel Administration Era (Until Around 2005): Until the early 2000s, HR in Nepal was largely known as Personnel Administration. The primary focus was on employee administration, payroll, attendance management, statutory compliance, and industrial relations. Organisations viewed people management largely as a support function rather than a strategic contributor to business success.
During this period, dedicated personnel or HR departments were uncommon in corporate headquarters. Such functions were more prevalent in factories and operational units/hotels where workforce management and trade union engagement were critical. The role was primarily reactive and compliance- driven, with limited or no involvement in business decision-making.
Institutionalisation of Human Resources (2005–2012): Between 2005 and 2012, I witnessed that Nepali organisations increasingly recognised the need for formal Human Resource practices. This period marked the transition from Personnel
Administration to Human Resources.
Many established organisations created dedicated HR departments even at headquarters, and the terminology itself evolved from “Personnel Administration” to “Human Resources.” However, most organisations were still in the early stages of adopting contemporary HR concepts and struggled to institutionalise modern systems and processes.
This was also a period of significant learning and experimentation. Organisations actively benchmarked against both local and international companies, often adopting best practices through what I jokingly refer to as the “Ctrl+C and Ctrl+V” approach. While not always customised to organisational realities, these efforts helped create the foundation for modern HR practices in Nepal.
Strategic HR and Integration Era (2012–2020): From around 2012 onward, more progressive organisations began shifting their focus from merely implementing HR practices to aligning them with business strategies.
I often describe this period through the concepts of Vertical Integration and Horizontal Integration: • Vertical Integration involved aligning HR objectives and initiatives with overall business strategy. • Horizontal Integration focused on linking HR systems such as performance management, talent management, learning and
development, rewards, and succession planning into a coherent people management framework.
This era also saw the introduction of concepts such as HR Business Partnering and Centres of Expertise, particularly within multinational companies and leading Nepali organisations. HR started becoming more analytical, business- oriented, and focused on organisational capability building.
At the same time, organisations began paying closer attention to organisational culture, employee engagement, leadership development, and the broader social and economic context within which they operated.
However, despite these advancements, many organisations in Nepal continue to struggle with making the transition from operational HR to truly strategic HR.
Digital, AI, and People & Culture Era (2020–Present)
The COVID-19 pandemic accelerated one of the most significant transformations in the history of HR. Almost overnight, organisations had to digitise people processes, adopt remote working models, and rethink employee experience.
What was initially a response to a crisis soon became a catalyst for long- term change.
Today, leading organisations in Nepal are increasingly leveraging digital HR platforms, employee self-service solutions, HR analytics and dashboards,
AI-enabled tools and Robotic Process Automation (RPA) to improve efficiency and decision-making.
At the same time, HR has evolved beyond systems and processes to focus more deeply on People & Culture. Organisations are investing greater attention in employee experience, leadership behaviours, organisational values, well-being, diversity and inclusion, and culture transformation. The emphasis is increasingly on creating workplaces that support both business performance and human potential.
The Road Ahead
While Nepal has made significant progress over the last two to three decades, the overall maturity of HR remains uneven. Many organisations have implemented individual HR systems but have not fully institutionalised integrated, data- driven, and strategically aligned people practices.
In my view, one of the primary reasons is that many organisations remain satisfied with their current level of maturity and have limited exposure to emerging global practices. As a result,
they often underestimate the pace at which Human Resources is evolving internationally.
To remain globally competitive, Nepali organisations must move beyond viewing HR as a support function and embrace it as a driver of organisational capability, culture, innovation, and sustainable business success. The future of HR in Nepal lies not merely in managing people efficiently, but in building organisations that can continuously attract, develop, engage, and retain talent in an increasingly dynamic and interconnected world.
In summary, HR in Nepal has evolved from managing workers, to managing human resources, to enabling business performance, and now towards shaping organisational culture and employee experience through technology, analytics, and strategic people leadership.
Road ahead for organisations and HR professionals
While Human Resources practices in Nepal have undoubtedly evolved over the past three decades, the progress remains concentrated within a relatively small
number of established organisations. If we were to assess the overall maturity of HR systems and practices in Nepal, I would place it at approximately 2 out of 5, indicating that most organisations are still in the early stages of HR maturity.
In my view, nearly 95% of organisations in Nepal remain significantly behind global HR standards. Many are still struggling to institutionalise basic HR systems and processes, while only a handful have successfully transformed HR into a strategic business partner. As a result, HR in many organisations continues to be viewed primarily as an administrative and compliance function rather than a value-creating function.
Key Gaps in Nepal’s HR Landscape
Capability Gap: Many HR teams have limited exposure to modern HR practices, business strategy, workforce analytics, and emerging technologies. While they may manage operational HR processes effectively, they often lack the capability to contribute strategically to business outcomes.
Leadership Mindset Gap: A large number of business leaders still perceive
HR as a support function rather than a strategic partner. Consequently, people- related considerations are often absent from critical business decisions.
Technology and Innovation Gap: Although digital transformation has accelerated in recent years, most organisations are not fully leveraging technology, automation, data analytics, artificial intelligence, or modern HR platforms to improve efficiency and decision-making.
What Should Organisations Do?
In my view, to bridge these gaps and accelerate HR maturity, organisations should focus on three major priorities among others:
Invest in HR Capability Development: Organisations must continuously develop the skills and competencies of HR professionals. HR teams need to understand both the people context and the business context, and be capable of aligning the two. Only
then can they design and implement HR systems that effectively support organisational strategy while remaining relevant to Nepal’s social, cultural, and economic realities.
Embrace Technology and Modern HR Practices: Organisations should encourage HR teams to adopt modern tools, digital platforms, data analytics, and emerging technologies. The objective should not simply be automation, but enabling better, faster, and more informed people decisions.
Give HR a Seat at the Leadership Table: Organisations must recognise that people-related decisions are business decisions. HR should be represented within the Management Team and involved in strategic discussions from the outset. This ensures that organisational decisions are evaluated not only from financial and operational perspectives but also from talent, capability, culture, and sustainability perspectives.
What Should HR Professionals Do?
The responsibility for transformation does not rest solely with organisations. HR professionals themselves must evolve.
They must move beyond being policy custodians and process administrators and become genuine business partners. This requires developing stronger business acumen, understanding organisational economics, leveraging technology, and speaking the language of business.
HR professionals should continuously challenge themselves to understand the business beyond HR; build expertise in workforce analytics and technology; drive organisational capability rather than transactional activities; influence decision-making through data and insights; shape culture and employee experience; and partner with leadership to solve business challenges.
Conclusion
I see that the biggest challenge facing HR in Nepal is not a lack of policies, systems, or technology. It is a mindset challenge.
Organisations must move from viewing people as a resource to viewing people as a source of competitive advantage. Likewise, HR professionals must move from managing processes to building organisational capability.
The organisations that succeed in this transition will be the ones that attract the best talent, retain critical capabilities, build strong cultures, and remain competitive in an increasingly global and talent-constrained environment.
In summary, Nepal needs more progressive organisations and more business-minded HR professionals. When organisations prioritise people and culture as strategic drivers of business success, and HR professionals step up as trusted business partners, HR will finally move from being a support function to becoming a true creator of organisational value.
Shrestha is People & Culture Director at Gorkha Brewery Pvt. Ltd. (Carlsberg Group)
