HR Scenario in Nepal

Human Resource HR management in Nepal greentick


The Human Resource (HR) scenario in Nepal started from the year 2000. Until that period, there was no separate HR department used to exist in organizations generally. When businesses started to have difficulty in dealing with human resource management. They realized that effective management of the human resource is of the utmost importance for any organization. The Human Resource HR management scenario in Nepal is still in its early stages, while the developed and emerging economies have significantly progressed by deploying best practices and strategies in HR management. Over the past few years, Nepalese organizations adopting modern HR techniques has been rising with the increased sense of realization of the fact that people are the most important resource in any organization.


This concept came in Nepal with the entry of foreign joint venture companies, development partners, INGOs. They brought in a structured process for HR management for the smooth operations. Slowly, the Nepalese company started to adopt and practice effective employee management as foreign companies. Nepal Rastra Bank (NRB) made it mandatory to have a separate HR department in all commercial banks.


HR scenario in Nepal

The current Human Resource HR management scenario in Nepal has changed drastically over the years and it is gaining popularity among companies in Nepal compared to the earliest of the year 2000. As traditional belief was limited to capital investment superseding other resources such as people, technology, etc. With the advancement in technology and competitive market, their focus changed to hiring a qualitative workforce that is competent to meet the overall organizational objectives.


These days organizations emphasize more in recruitment, development aspects of the human capital. Still, some organization view people as liabilities which hinders the growth of the Nepalese companies. Similarly, HR companies were originated to provide recruitment service only but later on their focuses changed to employee training and development, HR system formulation and outsourcing, etc. Initially, there were only 55 companies practicing HR management but now there is more than 500 organizations with separate Human Resource HR management departments in Nepal. Over the last ten years, many educational institutions have started to provide specialized courses in Human Resource Management such as BBA, MBA programs. This program helps in development of skilled workforce in the future. The overall objective of the HR development is the continuous improvement. That is essential for survival and to ensure consistent performance with the business objectives.


In the context of Human Resource HR management in Nepal, many companies are progressing in managing human resources to meet the organizational goal and objectives. For example, MV Dugar Group, Chaudhary Group, NIC Asia Bank, Sipradi Trading, Standard Chartered Bank Nepal, Surya Nepal, Ncell, Dabur Nepal are some of the top organizations practicing the most efficient HR management. Others are still in a primitive stage due to lack of internalization of HR concept, lack of awareness, and absence of effective HR management trends in the country.


  • How it is Growing


Over the last decade, the HR sector in Nepal has seen a deep change in the recruitment process. Many private institutions are upfront in fulfilling HR needs in the organization through a structured and systematic approach with the right person in the right job. Besides these companies are also using different social media and personal references for recruitment. LinkedIn has become Prime Avenue of professional networks to find the desired individuals to fulfill the vacancies. Outsourcing the recruitment process to the HR solution companies or consultancy has also become popular nowadays.


This way, HR companies help organizations to focus in their core area and saving time from the long process of recruitment. There are many job portals such as,,,, are available for providing recruitment services. These recruiters have a repository of CVs from where they carefully scan profiles and match jobs accordingly. This helps the employer to get the right person for the right place for the job.


A systematic process with a proper policy is necessary to govern the activities of HR management. The recently endorsed Labor Act, 2017 provides flexibility in hiring in different modes, outsourcing, etc. The New Labor Act has shortened the probation period from 1 year to 6 months. There have been major changes in the terminal benefits such as gratuity that employers have to deposit 8.33 % of the employee remuneration in the Social Security Fund every month starting from the date of appointment. This has made a rise in the business costs which is already high because of the increased employee turnover rate. There is a formulation of Safety and Health Policy and the changes in the disciplinary action. In addition, certain other grounds has to provide on which employment can be terminated.


  • Performance appraisal (PA)


Basically, the organization practices the performance appraisal (PA) that aligns employees to the mission, vision, and goals of the organization. In Nepal, Self-Evaluation and 360 Degree Feedback is widely use to measure the performance of individuals. There is a practice of annual appraisal system based on KPIs. Which evaluate the performance based on the tasks assigned and the achievement of the objectives. The use of new technologies has been facilitating to overcome challenges in human capital management.


At present, Nepalese organizations are using modern techniques, digitization, and software. To reduce paperwork and eased the hassles in performance evaluation. Some companies are using different HR software according to their requirements. Private sector has also shown interest in integrating IT into their HR System. Even one could find an increasing trend of creating refreshment and the recreational area within the office to improve the working environment.


Although the employee turnover rate data is not available in Nepal. It is thought to be very high due to dissatisfaction over salary, opportunities, working environment, or personal issues. There is also a growing spirit for entrepreneurship among the new generation. It is quite challenging to make people work for a long time in the organization. A study has found that employees are more satisfied and committed. When their jobs are tailor according to their passions and skills rather than forcing them into predetermined roles. Hence, the organization can retain employees if they can blend those aspects properly.


  • Human Resource Society of Nepal


Human Resource Society of Nepal (HRSN) was established to create a platform for sharing knowledge, experience, ideas, and to strengthen HR professional practices in the country. HRSN has been able to organize HR conferences to encourage HRM students. To interact and create an experience-sharing platform for graduates. The challenges that have been observed in terms of HR management are that the things are changing rapidly and need to be adaptive through continuous learning and development process. Recruitment has been challenging due to a lack of a skilled workforce. People are more focused in gaining knowledge storing piles of information in their minds. Information is available anytime at this age however, skill need to process that information.


In a nutshell, Human resource development is a planned effort to develop job related skill, knowledge in order to improve employee performance. It is a continuous process and a formal need assessment practice is on demand which is almost non-existent in Nepalese organizations. Lack of cooperation and coordination between the management and the employee seriously impeded. The development of HR and the performance of the organization. Besides, providing training and development opportunity employees need to be empowered for effective and efficient functioning. Most of the organizations’ executives are unaware of the employee empowerment concept. Which has hinder the development of professionalism in the Nepalese businesses.



There is a need of development of a systematic approach. For the development and management of Human resources through precise policy frameworks and programs in Nepalese business organizations. For generations, its importance was overlook. But, with the advancement in technologies, competition and personal values of the workforce. The human resource management has gained increasing importance. Regardless of their size and nature, public or private organization.