How Organizations are Embracing L&D Practices for Growth and Excellence?
These are some of the examples that show how the private sector organizations, as well as government agencies, are giving importance to learning and development (L&D) activities in Nepal. Furthermore, a majority of private sector organizations have now started creating annual calendars for L&D exercises earmarking millions of rupees to train and enhance the skills of their staff.
To improve the performance of employees and to have an advantage in today’s highly competitive world, Nepali organizations, both private and public, are expanding their L&D activities. However, it is the banking sector that comes first in terms of prioritizing training and development of staff followed by the non-profit (development) and hospitality sectors. Similarly, some noted corporate houses have shown seriousness in this regard.
‘Cost’ in yesteryears, now it is ‘Investment’
The CEOs and heads of the human resource department of the majority of organizations who talked to the HRM agree that awareness about the need for capacity development of the staff has increased in recent years. “L&D has moved from cost to investment category,” said Sanjib Subba, CEO of Nepal Electronic Payment Systems (NEPS). “ I’m sure this will continue to evolve, and we continue to mature our process and expectations.”
Roshan Koirala, Chief Human Resources Officer at Nabil Bank echoed Subba. According to Koirala, Nabil Bank has earmarked a budget Rs 34.5 million for staff capacity development this year.
In Koirala’s words, the annual planning on learning and development activities is fixed by realizing what is the strategic intent of the organization and what kind of training is required for it.
Nabil Bank, for example, has introduced Moody’s Omega Program related to credit as well as conducted Harvard Business School’s strategy training for senior management of the bank.
According to Pankaj Pant, Head, Human Resource & Remittance Business of Siddhartha Bank, staff training and development in the banking sector have always been an utmost priority since the early days. “With every passing year, the dynamics have changed and the need for more quality programs with much accreditation for the professional growth of the bankers has grown,” he said.
The country’s leading corporate houses too are opening their purses for L&D. Anand Bagaria, Managing Director of Nimbus Holdings Pvt Ltd, says Nimbus is spending 5 percent of its total workforce bill on skills enhancement of the group’s staff. “I think the amount would increase to up to 12 percent in the foreseeable future. The amount is not just spent on physical training, it is also spent on technology and software systems,” he said.
Meanwhile, hospitality is another sector where training and development activities are also given high priority. According to Sabira Ranjit, L&D Manager at Hotel Mystic Mountain, Nagarkot, L&D has been an integral part of the hospitality sector. “As the hospitality sector is evolving, customers seek more improvement in services. Realizing this, the hospitality sector, especially star hotels, have started investing in L&D,” said Sabira, who has just joined Mystic Mountain to handle the resort hotel’s L&D Department.
Going Virtual
After the Covid-19 pandemic struck, many organizations adopted a remote working policy. As business slumped as the government enforced lockdown and other restrictive measures, the organizations had no other options than to adopt cost-cutting measures, including a reduction in their training budget. But as the corporate world started getting used to the remote working module, organizations started to conduct training programs virtually which became the mainstay to engage with their employees during the pandemic.
But the virtual method of L&D has both pros and cons, say the HR officials. “If you consider online and virtual learning as new technology interventions then perhaps everyone started this mainly due to necessity. There is an opportunity to profit from disruptions in learning technologies. It’s not fair for employees to spend the entire day in a lecture-style classroom setting. The monologue teaching method does not yield any value and is a waste of company resources,” said Sanjib Subba, CEO of NEPS.
According to Ashesh Maharjan, Founder Chairman of the Academy of Culinary Arts and Hospitality Management, the pandemic made remote teaching and learning a necessity, something that was a rare practice up until then. “This brought to the fore the need to re-calibrate the teaching/training modality from in-person to remote and virtual sessions.”
When it comes to virtual training, corporate leaders also argue that “the human touch” misses when organizations prioritize internet platforms over physical sessions.
According to Sashin Joshi, a former banker and Group Executive Director at Jawalakhel Group of Industries, people have started accepting online training, but there are drawbacks. “When you have 50 trainees on a virtual training session, it will not have much of an impact. I feel like group training should be physical, while training with only a few participants can go virtual,” he said.
HR professionals who talked to the HRM said that when everything is virtual, the connection is lost. It is because the connection is limited to the internet only and sessions are not interactive, as some put the call on mute and engage in other activities, and some just ignore the training session. In-person training and meetings build connections among employees, they say.
According to HR professionals, virtual L&D practices have helped organizations to save a huge amount of capital in logistics. “Before the pandemic, all the training used to be conducted in a physical setup. And the cost of logistics, airfare, and accommodation, among others, would be higher than the actual training cost. With the introduction of virtual training, you can bring experts from around the world without worrying about expenses. This is actually a blessing in disguise,” said Koirala.
A Major Milestone
In 2017, the central bank made it mandatory for the bank and financial institutions (BFIs) to spend at least 3% of their total staff expenses on their training and capacity development. This directive of the Nepal Rastra Bank (NRB) is considered an important step that also encouraged organizations in other sectors to spend more on staff training and development. “I take pride that I could play a small role in making that happen. This mandate helped create a sizable training budget in the banking sector and also led to a bit of distraction for everyone, he said, adding, “The idea was not to outsource the training activities but to help strengthen BFIs’ internal capacity so institutes such as the NBI could focus more on structured certificate-level courses. Due to the mandate, the industry has taken L&D activities more seriously and I’m sure in due course this would benefit the overall human capital development of the industry.”
Although the mandatory provision has forced BFIs to allocate a certain amount for L&D, banking leaders, on condition of anonymity, said that the resource has been wasted on many occasions.
According to Joshi, the central bank forced BFIs to mandatorily allocate 3% of staff expenses on L&D which has not been much effective. “With the policy in effect, banks are planning training in a haphazard way. They [banks] are just sending employees abroad without realizing the need for training,” he said. “Investment on L&D should not be forced, companies, themselves, should realize the need for it.”
Experts say that training and development practices only become meaningful when organizations move ahead with a clear vision. “Any organization must start with vision clarity. It means they must know where they are going, how they are going, and what could come in the way. Training for the sake of doing training or at random managerial interventions is a total waste,” said Subba, adding, “The structured ROI-based training approach should have a clearly defined vision, a set of strategies to achieve the vision, and action plans to achieve the strategies.” According to him, this is where the need for “Gap Analysis” comes into the picture. The Gap Analysis approach would help the company understand the existing status of skills available and match that with the overall company vision and identify the gaps. “Hence, structured L&D investment could focus on filling the gaps and enhancing the existing skillset,” mentioned Subba.
Realizing the need
According to Joshi, the corporate sector is yet to determine the need for training and development of employees. “There is no actual investment happening. Even the board and senior management have failed to realize the importance of training,” he said.
It is because, Joshi says that in the majority of companies, a few being exceptions, there are no HR managers in the top-level management. “In every company, investing in people management should always be looked after. But in Nepal, when we look at the HR practices, it feels like the corporate sector has ignored it,” he said, adding, “Having said that, the banking and the IT sectors are doing a tremendous job in the field of training.”
Likewise, companies are focusing more on hard skills rather than soft skills, say corporate stakeholders. Even when training is conducted, companies invest in hard skills like policies, regulations, finance, and accounts, among others. But soft skills like negotiation skills, handling customers, and presenting yourself, among others, are always ignored, say HR officials.
According to experts, while organizations have increased their investment in L&D in recent years, specific strategies are necessary to make the most out of L&D practices. “What is still missing is the return of investment (ROI)-based structured approach. Unless a company is able to align its L&D strategy with the company vision, there will not be any benefit from the whole exercise no matter what size of investment they put in,” said Subba.
On-the-job-training
From banks to the hospitality sector, on-the-job training has been a blessing for organizations to train staff. But hiring a fresher, and providing on-the-job training requires big capital. The amount of time a mid-career employee has to spend on the trainee is huge. Although the capital has to be invested, companies get results and they can shape the recruits as per their needs, say HR professionals.
While on-the-job training is common in organizations of all sectors, hospitality businesses have been utilizing this type of training practice to a greater degree which has helped the organizations to better serve their customers and address their changing needs. According to Maharjan, the importance of staff training in today’s competitive era is self-evident. “This is true for every business sector, and hospitality cannot be an exception. Whichever component in the gamut of hospitality and tourism we look at, whether it be hotels, restaurants, transportation, or destinations, quality of service indeed is the differentiating factor,” he said, adding, “And it goes without saying that trained and up-to-date people are the key to quality service delivery.” He observes that developments in the hospitality industry over the last few decades have revealed that consumer needs and expectations continuously change and evolve. “This clearly establishes the need for hospitality businesses to regularly train their staff so that they are abreast with, if not ahead of, changing customer needs,” he mentioned.
The major challenge, according to Ranjit of Hotel Mystic Mountain, for the hospitality sector, is to create a wholesome experience for customers. “The hospitality sector has to invest in learning, development and training of staff. If not, it will be tough to compete in this competitive market,” she said.
“As the tourism sector is reviving, and new hiring have already started, and hospitality businesses now also have to conduct refresher training,” Opined Ranjit. She also pointed out that training is not only for HR managers and other staff, but owners and high-level management should also participate in training events.
Lately, corporate houses of the country have started realizing the need for skills enhancement of their staff which signals brighter days ahead for L&D in the country. “We realized this need 7-8 years ago and established the HR department. Earlier, organizations always wanted to skip training as they wanted to keep their purse low,” said Bagaria of Nimbus Holdings.
According to Bagaria, corporate organizations should focus on both the soft and hard skills of their staff. “Realizing this need, we are also focusing on developing soft skills like communication, teamwork and leadership of our staff,” he shared.
“L&D has moved from cost to investment category”
Sanjib Subba is the CEO of Nepal Electronic Payment Systems (NEPS) Limited. He led the National Banking Institute (NBI) from 2010 to 2019 and worked to make NBI a leading banking academy in the country. In an interview with the HRM, Subba talked about the situation of training and development in the banking and fintech sectors and the use of technology for L&D, among other topics. Excerpts:
Why are Learning and development (L&D) activities important for any organization?
L&D plays a critical role in shaping the future of any organization. The dynamics are rapidly changing so is the way we do things. Irrespective of what industry or sector people are in, without a qualified and competent talent pool no organization can meet the expectations.
L&D helps keep your human capital in top form, perform and deliver its best, innovate and consistently meet the expectations. Just like humans need to stay fit to perform best a company must also stay fit. This is where L&D comes into the picture. However, L&D investment without strategic planning and vision would not yield any result and return in investment (ROI) for the company. Most importantly L&D is not just about hosting pieces of training but much deeper and should be backed by data, research, requirement, need assessment, and gap analysis among others.
How can organizations ensure the Learning and Development efforts are meaningful and result-oriented?
Any organization must start with vision clarity. It means they must know where they are going, how they are going, and what could come in the way. Training for the sake of doing training or at random managerial interventions is a total waste. The structured ROI-based training approach should have a clearly defined vision, a set of strategies to achieve the vision, and action plans to achieve the strategies. This is where the need for “Gap Analysis” comes into the picture. The Gap Analysis approach would help the company understand the existing status of skills available and match that with the overall company vision and identify the gaps. Hence, structured L&D investment could focus on filling the gaps and enhancing the existing skillset.
How do you see Training and development in Nepali organizations? How are training and development practices now in organizations here compared to 15-20 years ago?
We are evolving. Compared to the 1990s, we have come a long way. Over the last few years, we have observed increased awareness. However, it’s been a while since we have been stuck in the awareness stage. With increased awareness, the overall investment has certainly increased in L&D. What is still missing is the ROI-based structured approach. Unless a company is able to align its L&D strategy with the company vision, there will not be any benefit from the whole exercise no matter what size of investment they put in.
Organizations of which sectors give emphasis to training and development of staff and why?
Ideally, every organization whether it’s public or private must emphasize L&D activities. In Nepal, the banking sector followed by the development sector seems to have given it more priority including some noted corporate houses. Well, as I said earlier running L&D activities without proper strategy is just a waste of time and resources. Unfortunately, this is exactly what seems to be taking place now. However, this is also our opportunity to move from our present status to a more structured ROI-based L&D investment strategy.
What gaps and shortcomings do you observe in training and development in Nepali organizations?
There has been increased awareness and L&D has moved from cost to investment category. I’m sure this will continue to evolve, and we continue to mature our process and expectations. The key gap I find is the absence of structured interventions.
Nepal Rastra Bank (NRB) has mandated banks to set aside 3% of their total employee cost as the training budget at your recommendation many years ago. How do you see this has impacted the industry?
I take pride that I could play a small role in making that happen. Thanks to the former NRB Governor Dr. Chiranjivi Nepal who took positive note of my formal recommendations.
This mandate helped create a sizeable training budget in the banking sector and also led to a bit of distraction for everyone. The idea was not to outsource the training activities but to help strengthen BFIs’ internal capacity so institutes such as the National Banking Institute (NBI) could focus more on structured certificate-level courses.
The main essence of my recommendations was not only setting aside the mandatory budget. I had also recommended structured ways to the utilization of the said budget which yet has not been endorsed hence the major gap area remains as it is. The good news is due to the mandate, the industry has taken L&D activities more seriously and I’m sure in due course this would profit overall human capital development of the industry.
Having led the national-level apex banking academy (NBI) for nearly a decade, how do you see training and development in banks and financial institutions?
There is no doubt that BFIs have led the L&D leadership role in Nepal. We must be mindful of why it is critical for BFIs to continue their investment in Human Capital. The industry is very sensitive and prone to all kinds of risks most of the time.
Since they are the custodian of public deposits, the role of BFIs is very critical in maintaining the “Trust factor” which is the core strength of banking. At the onset of joint venture banks in the mid-1980s, the entire L&D activities were given utmost priority. However, with time and an increase in the number of BFIs, the focus shifted to the bottom line over other matters. It’s only after 2016, that the industry started serious reflection and initiated a somewhat reflective journey when it came to L&D. However, we still have a long way to go. Banks must reflect on existing L&D practices and reflect on how could they maximize the L&D investment.
Are they producing skilled banking staff who understand the essence of banking?
Banking is a very dynamic industry by itself. To withstand the wave of changes and ever-increasing risks the industry must invest strategically in its human capital. Banks would certainly profit from a well-resourced Research and Development (R&D) vertical led by top-notch economists. In my experience, most reputed banks around the world have invested wisely in the R&D vertical and recruited top talents, and given them full autonomy. The industry as per many experts stuck up in structural design flaws. This could be a combination of who controls the industry such as banker vs borrower discussion that so often surfaces in media. Then the number of banks vs national GDP issues followed by productive sector lending issues vs import-based financing. In addition, the assets and liability management issues have been so frequently surfacing leading to situations like liquidity crunch to credit crunch.
What changes technology has brought in training and development?
Globally, technology is the only core platform when it comes to training people. For a big size bank with a presence in nooks and corners of the world the classroom training does not yield ROI. Technology has increased engagement and learning has become fun. The gamification of Learning and Development (L&D) has made a huge transformation in every industry from hospitality, banking, and aviation to name a few.
Simulation-based learning has also disrupted L&D making learning more realistic and fun at the same time.
Are organizations in Nepal utilizing new technologies for training and development purposes?
Perhaps there are, but not to my knowledge. If you consider online and virtual learning as new technology interventions then perhaps everyone started this mainly due to necessity. There is an opportunity to profit from disruptions in learning technologies. It’s not fair for the employees to spend the entire day in a lectured-style classroom setting. The monologue teaching method does not yield any value and is a waste of company resources.
How different do you think training and development will be post-Covid period?
Let us accept the fact that training is not a magic wand. The classroom learning activity should be reduced to a bare minimum and let technology take the driving seat. The technology-led approach would help custom design courses to suit each individual.
There are many L&D modules based on self-pace and self-design based on individual learners’ competency and ability. So instead of throwing them in a classroom with uniform content that lasts a whole day, the delivery should be at the learner’s time, place, pace, and ability.
You’re now into the fintech sector. What is the situation of training and development in this sector?
There is a huge L&D requirement in our vertical yet almost courses are non-existence that would fit us. It’s mainly due to our industry being mostly practical and hands-on as well the industry is at the evolution stage.
I see a huge opportunity in fintech, payment space, data analytics, and cyber security. Payment space, in particular, switch based on a platform like ours is a bit complex compared to other payment interfaces. There are blockers and dependencies and in addition, the entire switch architect is a bit complex. This requires special expertise and that is almost nonexistent in the country.
“Training and development practices have shifted from informal self-learning to a need-based, structured and outcome-driven approach”
Ashesh Maharjan is the Founder Chairman of the Academy of Culinary Arts and Hospitality Management, a prominent educational institution dedicated to academic programs and training courses on hospitality. the HRM talked to Maharjan about various aspects of the training and development in the hospitality industry and the initiations of the academy. Excerpts:
How is the Academy of Culinary Arts working to produce skilled human resources for the hospitality industry?
Inspired by the importance and relevance of world-class hospitality service in Nepal, the Academy of Culinary Arts and Hospitality Management began offering a 1-year Diploma in Culinary Arts, in collaboration with Culinary Solutions Australia International in 2010. From the beginning, our diploma graduates were a professional success. More inspiring is the fact that they were doing exceptionally well not only in Nepal but also abroad.
The successful careers our graduates were able to architect for themselves reconfirmed our conviction and provided us with the impetus to introduce a 4-year undergraduate degree program in hospitality management in 2014. Our Bachelor of Science (Hons) in Hospitality Management (BHM) program has prepared graduates with the qualification and the skills essential for rewarding professional and entrepreneurial careers in the dynamic hospitality and tourism industry. In addition to our diploma and bachelor programs, our short-term modular (4-8 weeks in duration) courses in Barista, Bartending, Cooking, Baking and Pastry have served those seeking to acquire some basic skills to get employed.
How is the Academy providing training to staff of hotels for enhancing their skills?
As I mentioned earlier, we have been producing a competent workforce for the hospitality industry through a range of academic degree programs and training modules. Our graduates have been well received by the industry and they are making significant contributions to the institutions they are associated with, and at the same time are crafting rewarding careers for themselves.
However, tie-ups with hotels to provide training to their staff is an avenue that we are yet to explore. Our association with hotel/hospitality institutions as of now is limited to the student placement programs that we conduct on a periodic basis. Going forward, we believe that a focused collaboration in this regard will be a meaningful endeavor and will add value to all stakeholders. Active participation of the industry in this academia-industry tie-up is a necessary condition towards this end.
How do you observe the evolution of training and development practices in the Nepali hospitality industry?
Nepal as a tourist destination is endowed with unparalleled natural beauty and rich cultural heritage. The potential is immense and sustainably leveraging it requires the hospitality industry to adhere to world-class standards and practices. The hospitality landscape of Nepal ranges from world-renowned hotel brands to homestays and community-based tourism. While these assorted set of services caters to varied customer needs, the services have to be world-class. This is being increasingly felt and acknowledged by all hospitality service providers. As a consequence, the training and development practices in the industry have slowly but surely shifted from the traditional mindset of informal self-learning to a need-based, structured and outcome-driven approach. With the increasing number of service providers in the industry viewing training and development as rewarding investments, the future certainly seems promising.
What is the demand for training and development in hotels and hospitality businesses in Nepal?
It is a fact that the tourism and hospitality sector is one of the major drivers of the Nepali economy. Official data indicate that the industry’s contribution to the country’s GDP is around 3-4% and it accounts for close to 25% of foreign exchange reserve. It is Nepal’s fourth-largest industry in terms of employment and directly employs around 200,000 people along with about 1.2 million indirect employments. The participation of women in this workforce is nearly 50%, which is a commendable benchmark. Moreover, two international airports will come into operation soon, new hotels, trekking routes, and travel destinations, as well as concerted efforts to promote Nepal as a hub for Medical Tourism and also for Meetings, Incentives, Conferences and Exhibition (MICE as it is colloquially known) indicate the urgent need for trained and skilled human capital.
These statistics clearly indicate the strong scope for highly skilled and productive human resources in the hospitality industry. So, as far as need per se is concerned, yes, the industry demands robust training and development endeavors, more so given its preeminence vis-à-vis overall national prosperity. As for the question of whether a vast majority of the service providers in the industry are fulfilling this need, I view that albeit the status is much improved compared to yesteryears, there is still some way to go. I think it is important for the industry and academia to work hand in glove for meeting the purpose.
Why is it important for hospitality businesses to regularly train their staff?
The importance of staff training in today’s competitive era is self-evident. This is true for every business sector, and hospitality cannot be an exception. Whichever component in the gamut of hospitality and tourism we look at, whether it be hotels, restaurants, transportation or destinations, quality of service indeed is the differentiating factor. And it goes without saying that trained and up-to-date people are the key to quality service delivery. Moreover, developments in the hospitality industry over the last few decades have revealed that consumer needs and expectations continuously change and evolve. This clearly establishes the need for hospitality businesses to regularly train their staff so that they are abreast with, if not ahead of, changing customer needs.
How does the Academy of Culinary Arts ensures that its efforts in training and development are result-oriented and those who receive training are competitive in the domestic as well and international markets?
As I said earlier, our students are successfully employed not only in Nepal but in reputed hospitality outlets all across the world, from Australia and Europe to the Middle East and India stands testimony to the fact that we at the Academy of Culinary Arts & Hospitality Management are preparing competent graduates who are ready for the employment market.
Our contemporary pedagogical practices, intensive training regimes, state-of-the-art physical infrastructure, ICT-enabled learning environment, experienced teachers, trainers and mentors, and a professional management team dedicated to student-centric policies and practices are the means that make our academic courses and tourism and hospitality industry.
What changes Covid-19 has brought in training and development practices in the hospitality industry?
The Covid-19 pandemic caught all of us off-guard and I think it would be fair to say that we were not prepared at all to navigate the calamity. It did adversely affect all walks of life, but its crippling impact on the hospitality industry was more severe compared to other industries.
Regarding the institutional experience of the Academy of Culinary Arts & Hospitality Management, switching from physical and in-person learning and training sessions to the ICT facilitated remote learning environment was an overwhelming challenge, to begin with. The overnight tectonic shift was overpowering for both learners and educators. Psychological stress resulting from personal and professional reasons, unequal access to computers and accessories, intermittent and undependable internet connectivity compounded by lack of ICT skills and involuntary resistance to remote learning all contributed to training and development taking a severe hit.
But now that the pandemic is subsiding, we realize that tried and tested ways of conducting our lives are not always as certain or useful as we assumed them to be. The pandemic has forced us into being prepared with alternate means and approaches to training and development. In this regard, ICT has emerged as the most viable alternate; therefore, uniform and equitable access to ICT resources along with the willingness and dexterity of trainers and trainees alike in its use stand foremost.
What factors do trainers need to be mindful of when it comes to conducting training activities post-Covid? How is the Academy of Culinary Arts working in this regard?
The pandemic, among other things, made remote teaching and learning a necessity, something that was a rare practice up until then. This brought to the fore the need to re-calibrate the teaching/training modality from in-person to remote and virtual sessions.
Trainers in the post-Covid world should always be on the lookout for ways and means to fruitfully engage learners in remote sessions as they would in a physical in-person setup. Remote teaching and training are a comparatively recent phenomenon and, as such, its refinement calls for further exploration.
