the HRM
A total of 112,156 students left Nepal to pursue higher studies in Fiscal Year 2023/24. The Ministry of Education, Science, and Technology (MoEST) reports that these students obtained No Objection Certificates (NOCs) to study in 66 countries.
This significant number of students leaving for higher education abroad highlights a lack of trust in Nepal’s education system. The country faces a talent drain, with potential entrepreneurs, taxpayers and skilled human resources leaving. This exodus can negatively impact Nepal’s economy and erode confidence in its future.
Nepal Rastra Bank (NRB), responsible for managing foreign currency reserves, estimates that Students are not only choosing universities in developed countries but also in regions with high crime rates and even war-torn areas. While pursuing higher education, they are also seeking opportunities beyond their home country.
Kedar Bhakta Mathema, Former Vice Chancellor of Tribhuvan University and Former Ambassador to Japan, believes there are multiple reasons for students’ outmigration. He suggests that unless students see potential in Nepal after completing their studies, they will seek opportunities elsewhere. Mathema urges the government to investigate the reasons for this exodus and take immediate action.
The country faces a shortage of opportunities, with only 18% of enterprises employing more than 20 employees. Mathema argues that by creating more opportunities, Nepal can attract returning Nepali professionals, similar to how Non-Resident Indians (NRIs) have returned to India. He emphasises the need to attract foreign direct investment to complement domestic investment and generate more opportunities.
Mathema acknowledges that the education system may not be solely responsible for students leaving the country. He suggests that students may believe pursuing higher education in a foreign country can provide multiple benefits, including better job prospects in the future.
Professor Bishwambher Pyakuryal, in his autobiography, describes his internal conflict upon returning to Nepal from the United States. After completing his higher education in the ‘land of opportunity’, he faced a difficult decision about whether to return to the ‘land of possibility’.
Despite spending a significant portion of his career teaching at Tribhuvan University and eventually retiring, Professor Pyakuryal emphasises the urgency of Nepal’s situation. He warns that Nepal risks missing out on prosperity if it does not take timely action.
Pyakuryal highlights Nepal’s economic challenges, stating that it is the second-poorest country in South Asia after Afghanistan. With a per capita income of only USD 1,456 until Fiscal Year 2022/23, he asserts that Nepal cannot achieve its desired level of prosperity without developing a human capital that meets the demands of the market.
Key interventions envisioned by the government
The government’s long-term vision for 2100 B.S. (2043/44) aims to achieve prosperity through the development and full utilisation of human capital, accessible infrastructure, sustainable production and equitable national income. It targets increasing per capita income from USD 1,456 to USD 12,100.
The 16th Plan (2024/25 to 2028/29) aligns with this vision by prioritising the development of a healthy, educated and skilled human capital. The plan proposes various programmes to enhance human capital development and integrate human resource development with productivity boosting. It aims to skill the labour force based on market demand, provide opportunities for foreign employment, develop an information system to track labour supply and demand, and strengthen technical and vocational education.
The plan also emphasises the importance of technical education from the school level, advocating for a policy that skills human resources based on student interests and abilities. It aims to increase investment in physical and educational infrastructure, develop sectoral plans to address national human resource demands, and conduct skill testing and development programmes.
Due to a lack of skills, many Nepali workers in foreign labour destinations are forced into high-risk and low-paying jobs. As businesses increasingly focus on learning and development (L&D) to empower employees and improve business performance, the government needs to take serious steps to address the skill gap comprehensively.
Professor Subash KC, Former Dean at Kathmandu University School of Management (KUSOM), argues that both the government and the private sector should prioritise learning and development. He criticises Nepal for missing opportunities to mainstream human resource development during the early days of liberalisation. KC notes that a report submitted to the government through the High Level Administration Reform Commission in 1991/92 was not fully implemented.
Private sector approach
The private sector has been providing opportunities for the skilling, upskilling and reskilling. Skill development of human resource has a very strong and positive correlation with productivity. Private sector and formal institutions having solid inventories have been offering such opportunities. Nita Rana, a senior HR professional who has served in various sectors including the hospitality sector has said that based on attitude, aptitude and agility, staffs were provided opportunity of learning and development. “I have provided opportunities to various staffs in various areas like HR, marketing and sales, among others,” she said, adding, “Skilling, upskilling and reskilling are crucial for the company’s overall performance.
Earlier, banks and financial institutions (BFIs) had established training centres, such as the Agricultural Development Bank Limited (ADBL), initially, had a mandatory provision to obtain rigorous training before being deployed to the field including managers, according to officials. Some of the banks and financial institutions have their own academy to train staffs, such as NMB Bank has its training institute, NMB Academy. NMB established its training institute in 2017 with an aim to provide the best training environment to its staff and make them able to deal with every challenging situation. Siddhartha Bank has its own training institute.
Nepal Rastra Bank has a mandatory provision to spend 3% of the total gross annual staff expenses on employee training as its initiative to develop professionals with needful banking skills.
Meanwhile, Agricultural Development Bank Ltd Central Training Institute, Bode Bhaktapur, a well-facilitated training centre, however, has been facing trouble to justify the purpose of this institution in modern days. Moving ahead, the corporate houses, considering the requirement to train their staffs for skill development, upskilling and reskilling some of the corporates have been establishing separate arms such as MAW Skills Academy, which provides competency-based skills training delivery and conducts skill development programme as per the Council For Technical Education and Vocational Training (CTEVT) approved and industry-aligned curricula.
Relatively, multinational companies (MNCs) provide better opportunities for upskilling and reskilling to their employees. Surya Nepal initially used to send top talents as interns in different verticals of ITC in India. Individuals who have worked with Coca-Cola have had the opportunity to participate in training programmes, including at Coca-Cola University in Atlanta, Georgia.
Rana believes that the private sector should develop talent internally and fill senior positions with qualified individuals from within the company. She emphasises that talent acquisition is crucial for organisational growth and that CHROs should be able to identify and nurture talent.
Data indicates that only 32% of firms offer training to their employees. Investing in human resource development to enhance employee skills is often a low priority for companies.
Consolidation of scattered programmes must
The government has also been running various skill development programmes under different ministries, such as the Ministry of Industry, Commerce and Supplies; Ministry of Labour, Employment and Social Security (MoLESS), Ministry of Education, Science and Technology and Ministry of Women, Children and Senior Citizens. And there are many technical and vocational schools run by the private sector. It is reported that there are 272 CTEVT affiliated private training institutes in Nepal out of which 26 training institutes are in Kathmandu. However, Nepal sorely lacks skilled human resources, managers, professionals and technicians among others.
To improve the effectiveness of government-run training institutes, they could be consolidated under a single authority. Keshav Acharya, a senior economist, suggests that the National Vocational Training Academy (under MoLESS) and the Industrial Enterprise Development Institute could work together to create a synergy between skill development training and enterprise development facilitation. He emphasises that a lack of interagency coordination and isolated operations hinder efforts to address unemployment, skill shortages and enterprise development.
The government of Nepal once proposed developing the Nepal Administrative Staff College into a regional training hub for South Asia. However, this plan remains unfulfilled. If implemented, Nepal could establish itself as a training hub in the region and attract trainees from other countries.
Swarnim Wagle, an economist and parliament member, believes that Nepal’s limited vision and focus on domestic issues are hindering its progress. He argues that a broader perspective is necessary to achieve significant advancements.
Development partners support in skill development and effectiveness
Development partners have long supported Nepal in learning and development through education, training and exposure programmes. They emphasise the importance of developing skills for Nepal’s progress.
Recognising the need for skilled and technical human resources, Nepal sought assistance from the United States in 1972 to establish the Agriculture Campus (Rampur Campus). As an agrarian country, policymakers understood the crucial role of skilled human capital in transforming the agriculture sector. This principle applies to all sectors of development.
Nepal has received substantial support from multilateral and bilateral development partners for education and training investments. However, the effectiveness of these investments is often questioned, as progress in developing skilled human resources remains insufficient.
In addition, development partners have implemented various programmes and projects at the provincial level in collaboration with provincial ministries. ENSSURE Phase II, supported by the Swiss Development Cooperation in Nepal, has conducted skill development programmes in Koshi, Bagmati and Lumbini Provinces. Thirty-three local governments were identified in collaboration with the Ministry of Social Development (MoSD) in these provinces.
The project has ambitious targets, including internships or apprenticeships for 3,000 individuals. Of these, 1,800 are from socially discriminated groups and 990 are women. The project also plans to conduct short-term training for 6,800 individuals, including marginalised groups and women, and provide further training for 2,000 workers. Additionally, it aims to engage with 3,000 returning migrants.
Dakchyta: TVET Practical Partnership, funded by the European Union and managed by the British Council in Nepal, has revised the TVET Policy and focused on capacity development for individuals, institutions and organisations involved in TVET.
While there has been a significant expansion of TVET, with the number of institutions increasing from 5 in 1980 to over 1,557, the effectiveness of these programmes is questioned. Experts suggest that the investments need to be re-evaluated.
During the post-earthquake reconstruction, extensive training programmes were conducted for various construction skills. These programmes were implemented by various agencies and development partners. However, the government has not been able to maintain a database of skilled individuals or effectively connect them with employers through the Employment Management Information System (EMIS).
Where should we focus?
Nepal faces a shortage of skilled human resources in nearly all sectors. Bhawani Rana, Former President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), notes that Nepali industries are importing skilled and semi-skilled labour from India due to a lack of suitable domestic workers.
Paradoxically, while Nepal grapples with high unemployment, foreign workers, primarily from India, are coming to Nepal to work in industries. Rana attributes this inconsistency to a lack of coordination between government-run training institutions and the demands of the labour market. He emphasises the importance of industry collaboration to ensure that training programmes meet market needs.
Developing skills is a crucial factor in driving Nepal’s accelerated development. Mahesh Bhattarai, Member Secretary of the Council for Technical Education and Vocational Training (CTEVT), suggests a multifaceted approach to achieve this goal.
Bhattarai recommends operating technical vocational schools and training centres under public-private partnerships, collaborating with universities to update courses and incorporate practical skills, conducting apprenticeship programmes to bridge the gap between education and employment, and collaborating with startup incubators to provide training in business management, finance and marketing while developing entrepreneurial skills.
‘Skills are lifeline’
Kedar Bhakta Mathema, Former Vice Chancellor, Tribhuvan University
Opportunities are limited for individuals lacking specific skills. While employment opportunities within Nepal are scarce, there is also a shortage of skilled human resources. This combination forces Nepali workers into low-paying jobs.
In Nepal, only 18% of enterprises employ more than 20 employees, indicating limited opportunities. This is due to a lack of foreign direct investment and insufficient domestic investment. Additionally, the growing service sector can be operated with fewer human resources. Significant increases in foreign direct investment and domestic investment are necessary to improve the situation.
Multiple factors contribute to the outmigration of students from Nepal, but a fundamental reason is the perception of limited opportunities for a good life within the country. The high cost of living in Nepal, including education, healthcare and other expenses, forces many to compromise their quality of life unless they secure high-paying jobs or lucrative businesses.
Globally, 33% of education funding goes to the private sector. In Nepal, however, 51% of education investment is directed towards the private sector, leading to higher costs. Nepal must prioritise improving public education to reduce educational expenses for families. The deteriorating quality of public education often compels families to choose private education, which can be expensive. This can lead to families sending their children abroad for perceived better quality education and opportunities.
Some students have asked me why Nepal cannot offer ‘earn and learn opportunities’ like other countries. I respond by asking them where such opportunities exist. Students enrolled in universities in developed countries often have the opportunity to earn money by working part-time.
‘In-house skill development, upskilling and reskilling prepare future leaders’
Nita Rana, Senior HR professional
In-house skill development opportunities have a strong positive correlation with productivity and overall organisational growth. This approach encourages human resources, prepares future leaders and nurtures high-potential individuals.
By assessing employees’ education, attitude, aptitude and agility to learn, we can identify their strengths and provide them with opportunities and responsibilities. I have personally mentored many individuals in various organisations based on their interests. For example, I have helped reception staff transition into HR roles and finance/account staff excel in sales and marketing through targeted training and orientation.
Humans naturally have a curiosity for new things. By identifying their potential, we can provide them with opportunities to enhance their skills and perform effectively, efficiently and innovatively. Through reskilling, some employees can successfully transition to different departments.
Skill development through work is an excellent way to nurture careers and achieve growth. Skilling, reskilling, and upskilling are fundamentally important for any company or organisation.
‘We should respect all types of work’
Mahesh Bhattarai, Member-Secretary, CTEVT
A pervasive culture in Nepal is a lack of respect for certain types of work. Many in society still view blue-collar jobs as inferior, discouraging individuals from pursuing these careers and prompting them to seek foreign employment opportunities.
To elevate the status of all types of work, CTEVT has proposed skill certifications. These certifications can be crucial for claiming insurance or other benefits in case of workplace accidents, as they can help determine whether a machine malfunction was responsible.
However, skills alone are not sufficient for employment. There must be available jobs and skilled individuals must be willing and able to work. All stakeholders have promoted entrepreneurship and investment to create more employment opportunities. CTEVT has launched the ‘Workers Further Training’ programme to upskill and reskill workers, enabling them to earn more with enhanced skills.
