The Case for Competitive Job Market in Nepal

  • Why can’t employees expect better compensation packages while joining new jobs?
  • Why can’t an employer fire an employee when the person is not needed in the company?

These are basic questions while talking about employer-employee professional relations. However, finding answers or implementing the solutions in this regard is very difficult in the context of Nepal. Basically, the problem is there because the job market is still to be mature. As per the policies in Nepal, all employees are recognized as laborers in the country. The term “labor” may not fit well in all the categories of employment.

I would like to bifurcate the stakeholders in developing a competitive job market from a broader angle into three parts: Employee, Employer and the employment policy.

Employment is highly protected by government policies in Nepal. If an employee joins an organization, there is a very less chance that any employer fires him because of a lack of performance. The quantitative performance evaluation process is still to be well tested in the organizations here. On the other side, government policy does not or rather cannot specify the evaluation process. There is another aspect to it of the policy, the employee is to be evaluated three times before making him/her exit the organization. If the employee challenges the organization in a court of law, there is a very chance that the law may interfere in the evaluation process of any company. The loopholes in the Labor Act can be a tool to get benefits from both parties for their own good.

Bank and financial institutions (BFIs) are major job contributors in the realm of the Nepali private sector. This sector is comparatively organized and highly regulated. The BFI sector is organized in many ways – new entrants are fresher graduates from management colleges, where course materials are designed for the sector. The sector is having in-house training and growth opportunities. The job created in this sector is supplied by their own people. There are very less job opportunities for outsiders. This major job contributing sector has surplus employees and the merger and acquisition requirement is a new challenge for job seekers in the sector.

The job creation in the insurance and hotel industry is almost similar to BFIs in terms of job opportunities for white-collar jobs at mid-level and above in the management hierarchy. Generally, the new entrants are fresher graduates and there is a limited entry/exit options for the outsiders in the industry. So, there is not much scope for outsiders.

In Nepal, most corporate houses are family-run and are led by kins and direct relatives of the business owners. The centralized decision-making process in such organizations is a discouraging factor for career enthusiastic employees. Many employees might feel that their career growth has stalled, and they have become stagnant in their own positions after a certain period of time. These employees neither leave their job nor work productively for their growth inside the organization. These job opportunities become unattractive in long run for new entrants in the job market.

Nepal is still to have better professional skill development training institutes; the senior leadership training opportunities are almost nil. There are two angles to have a look into it; one, where there are no growth opportunities and a comparatively low pay scale why anyone would plan for a senior leadership training with high investment into it. On the employer side, there is no guarantee of employees continuing in the job after completing the training, why the organization would sponsor high-cost training opportunities. This may be the reason for no better training institutes targeted at senior professionals.

The government is focusing on job creation for blue-collar jobs. White-collar jobs are very less added to the new job opportunities. The educated office-going population has very low job creation for them, and the available job does not pay well due to lack of competition, in this context, there is very less scope for investment in self-development courses.

The employer after high investment in setting up an organization, they should be allowed to filter out non-performing employees and replace them with competitive employees without many conditions into it. The notice period applicability has to be there for sure, but the performance evaluation requirement is an additional burden for employers. The mutual agreement option is in practice; however, this has the upper hand in favor of employees. Due to this reason, the employers get cautious in hiring. A bad hire can damage the culture of an organization. The reference check/background verification process is still to be developed.

The labor act is outlined in safeguarding blue-collar jobholders. The provisions in the Labor Act should be inclusive of a wider group. The opportunity created for a collective bargain as envisaged by Act is not likely. The trade unions have become the flag bearers of different political parties. Neither employee nor employer can be benefitted from having trade unions in their organization. The condition of the minimum number of workers required to register for trade union works only for those who want to disturb the working conditions of an organization. We have heard many examples of industries shutting down due to unrequired interference by trade unions. This is the right time to develop a comprehensive employment/labor policy for the country.

In short, there are limited job opportunities in Nepal for job seekers to have decent pay which is sufficient enough for standard living conditions. The acceptance of the ‘hire and fire policy’ may add some excitement to the monotonous job market. The supply and demand in the job market will become automated in such a way that non-performers will be left out. The employees shall focus on their own development to become or rather remain highly competitive. This will result automatically in more productivity; at end of the day, those employees can expect a better pay scale.

Therefore, we as HR professionals need to coax for proper hire-and-fire policies in the government’s labor rules and regulations.

Neupane is an HR Practitioner. He can be reached at

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