“There is an increased awareness of HR among organisations in Nepal”
What changes have you observed in the Nepali HR landscape over the years?
There have been a lot of changes in the Nepali HR landscape in recent years. Till 2000, human resource department as such did not exist in the form of a separate body in Nepali institutions. Rather, the department used to be clubbed with other units such as accounts and general administration. This scenario has changed drastically over the years and human resource management is getting a lot of attention in the Nepali organisations lately. Organisations have realised that establishing HR departments helps to manage employees in systematic ways. However, there is still a long way to go in this regard when we compare the situation with other countries in the world.
How has the Nepali HR landscape evolved from traditional to modern form?
There is an increased awareness of HR among organisations in Nepal at present. The increased sense of realisation about the importance of human resource management is due to the fact that people are the most important resource in any organisation. The traditional belief and mindset of the people used to be limited to capital investment in the past. Sufficiency of money used to mean that it would supersede other resources such as people, technology and so on. Then technology came into the picture. Technology is important but it is also a brain child of people. Nowadays, organisations highlight the qualities of human capital. They emphasize recruitment, development, motivation and retention aspects of the human capital. Every organisation wants to hire a qualitative workforce that is able to contribute to the strategic goals. However, we have still to go a long way in terms of human resource development. If we can retain people within the country and engage them in the nation building process, we will not have the crunch of workforce in the future.
What traditional mindset in HR do you see hinders the growth of the Nepali companies?
The traditional mindset still prevails in many organisations when it comes to human resource management. It sees people as liabilities whereas the modern philosophy of HRM takes people as the most important asset in the organization.
How has been the four years journey for Human Resource Society Nepal (HRSN)? What major accomplishments would you like to highlight for HRSN in this period?
HRSN was established in 2013 with the effort of enthusiastic HR professionals and practitioners to create a platform for sharing ideas, knowledge, experience and issues and also to cooperate with each other for strengthening HR profession and practices in the country.
Along with the initiatives to promote HR awareness in the Nepali context and assist professionals to enhance their competence, HRSN hosts the annual HR conference as well as knowledge sharing sessions on relevant HR related topics on a monthly basis. Recently, the session was expanded outside the Kathmandu valley also. We also encourage students of HRM to interact with us in our experience sharing sessions which is held twice a month on the HRSN office premises.
What impacts have the activities of HRSN made on the organisations and employees of companies in Nepal?
The impacts of the activities of HRSN have been very positive and manifold so far. We have successfully organised human resource conferences six times on various relevant themes since the organisation’s establishment. We have conducted knowledge sharing sessions by inviting experts to our members and professionals. Recently we have also started an experience sharing platform for college graduates. HRSN is a voluntary association of HR professionals. The executive committee members are also busy individuals. In spite of this, we have been contributing our best to strengthen the HR fraternity.
What external and internal sources have Nepali companies been utilizing for recruitment process?
Outsourcing through HR companies, advertising of job openings in newspapers, use of social media and personal reference are being widely used by Nepali employers. Meanwhile, headhunting and employee poaching are also in practice.
How do you view the role of succession planning in the success of any organization?
Succession planning is a systematic approach to build the leadership pipeline, develop successors and identify the suitable candidates and fill in the critical positions by most competent human resources in case of retirement, resignation and so on. After identifying the potential successors, an action plan for the following activities is important like training, coaching and mentoring, feedback, job rotation, etc. But the implementation aspect of succession planning in any organisation is more important than simply having a policy.
What do you think are some of the effective ways to retain people in an organisation?
Retention of employees depends on several factors. I think we cannot generalize everything theoretically. But normally retention is based on two factors of extrinsic and intrinsic motivations. Extrinsic factors are direct and indirect compensation in the form of salary, incentives, bonus, benefits and a host of financial rewards. Similarly, non-financial rewards also known as intrinsic motivation also play a vital role in employee retention. They may be in the form of job satisfaction, variety of challenges and responsibilities of the job, praise and recognition for good performance, autonomy, career advancement, belongingness, etc. If the organisations can blend these aspects properly, then employees will not quit easily. As a result there will be a lower employee turnover.
What are the most important skills Nepali companies in general look for in the candidates while hiring?
In short, human resource is the knowledge, skill and behaviour of the people. Skill requirement is based on the type of job a person is performing. Different types of jobs demand different types of skill sets. However, skills such as knowledge of the job, communication, report writing, problem solving and team work are important in the organisations.
What challenges have you observed over the years in terms of HR management?
We will never be free from challenges. Things are changing very fast and we need to be adaptive to the changes. Otherwise our skills will become obsolete. Therefore, continuous learning, development of people etc are necessary in any organisation.
What are the most dissatisfying and demotivating factors for prospective candidates and staff of the companies in Nepal? How do you think these issues can be addressed?
Hiring right persons with the right aptitude and attitude is essential to solve most of the problems in organisations. In the meantime, it is also important to educate people, teach them the right way to do things, and motivate them in terms of rewards and compensation and proper feedback for higher level of performance and productivity.
“Even some big organisations are stuck at simply implementing basic HR functions”
How has the Nepali HR landscape evolved over time?
The post-1990 period saw improvements in transportation, accounting and taxation, sales, marketing and promotion. Business administration and operations were also shaping up in the background along with the supply chain management. The use of computers also increased in the meantime. A sense of realization among businesses began to grow that they need people to manage all these functions and manage the changes that are happening around.
If you look at the government initiative in HR, it can be traced long way back. The Public Service Commission was established in the early fifties to recruit public servants independently. Post-90, MNCs and development agencies entered Nepal with embedded HR systems. It was an awakening for us. Later, Nepal Rastra Bank required all commercial banks to have a separate HR department. Despite all these progresses in HR management, the private sector has been not been able to practice HR management comprehensively.
To what extent is HR management being practiced in Nepali companies?
MNCs operating in Nepal have been practicing HR management at exceptional levels. So are banks and INGOs and few business houses. In the rest of the organisations, HR management is still in a primitive stage. Even at big organisations with huge turnovers, it is stuck at simply implementing basic HR functions that include tasks such as managing daily activities like payroll management, salary disbursement, employee attendance and leave management. They haven’t been able to integrate advanced HR practices in their management system. What they need to understand is that HR system is not only about managing day-to-day HR functions, but also about managing the human resource and developing it.
HR management is in fact people management. Devising retention strategies, developing HR policies and overseeing effective implementation, ensuring employee motivation and satisfaction and succession planning are some of the ways of managing people. HR development is about linking organisational objectives to individual career development planning. Training programs, skill enhancement and developing career path for staff are the major parts of HR development.
With startups, what I have observed is that they are young and run on ideas only. They have limited knowledge about how an organisation should be run and what it takes to become a key player in the future.
What are the HR trends and practices that you observe in the Nepali market?
Recruitment is a common practice that Nepali companies and development agencies are availing as HR solution. For instance, Standard Chartered Bank Nepal posts its vacancies only on our recruitment portal now. The use of biometrics to record attendance is another emerging trend. Adoption of Human Resource Information System (HRIS) is another trend in personnel management.
Talking about Real Solutions, we use the HRIS called Real HR Software that we have developed on our own. We have also installed it in around 10 companies including Kantipur Publications which has more than 2,000 employees. Other users include INGOs and insurance companies.
The software is simplified, useful and logical to use. With the use of the application, companies can analyse their human resource through different dimensions and even monitor the business. It can be also used for entire internal communication. It allows employees to record their grievances, see their assigned tasks and line authority relationships, monitor their tasks and performance and analyse other variables that are useful for the companies. The cost of the software depends on whether companies want it in their own server or cloud-based installation, number of employees and features they want.
Other Nepali companies are also using different software according to their needs. MNCs operating in Nepal have inbuilt HR system including the HR software. I have observed that private sector firms have been gradually showing interest in integrating IT into their HR systems.
Similarly, increasing activities in refreshment and recreation are also among new trends in HR. Such activities are gaining prominence particularly in IT companies. Companies are also adopting an open office trend where there are a number of recreational and refreshment points within the office premises. Kantipur Publications is one such company. Companies are also prioritising ways to provide proper working conditions. The practices of providing subsidized meals and in-house cafeteria is getting popularity.
What can be efficient ways for employee appraisal in Nepali companies?
Internationally, there is a rethinking about annual performance appraisals. Several studies have pointed out to the deficiency of this type of evaluation methodology. How can a manager remember what an employee did a year ago or even a few months ago? With the use of technology, we can now track down tasks on a daily basis and conduct reviews on a weekly or monthly basis. The quality of work can be monitored on a regular basis. Why should anyone wait for a year? If someone is doing well, why should a manager wait for a month to pat on his back? An upfront appreciation of work will be more motivating to employees than making him wait for a year. It is not only about motivation but also about talent acquisition and retention.
In Nepal, it may not happen anytime soon. Nepali companies have been gradually adopting the 360 degree feedback method. Some are even applying the ‘3+1’ method where ‘3’ measures the overall employee performance and ‘1’ shows the employee learning. Since the performance appraisal is a tedious task, technology is being used to measure the quantifiable outcomes.
As I said earlier, HR automation has been a major agenda in international businesses for the last two years. The number of staffers is large in international companies which means the institutions need to deal with a huge data. Analysing such statistics requires HR automation which has also substantially increased the demand for data scientists.
What role has Real Solutions played in HR management and recruitment in its 15 years of operation?
Real Solutions has been playing a very meaningful role in terms of raising awareness about HR system in Nepal since its inception. Realising that it won’t be enough, we even formed the Human Resource Society Nepal (HRSN). The collective efforts have created a buzz about HR in the country. The importance to have a proper HR ecosystem has started resonating in the private sector. I believe we have succeeded to some extent as you can see a number of big companies, although few, are duly practicing HR systems.
We have also played a major role in reducing nepotism and favouritism in staff recruitment by helping companies establish a system wherein the right candidates get fair job opportunities. We delivered mass recruitment services for post-earthquake relief works initiated by INGOs and tracked their works on a daily basis. We also set up a UN traineeship program at UN House for marginalized communities. Six batches of around 30-35 trainees in each batch have passed out so far. We are the pioneer in introducing background verification, for example certificate and residence verification, of employees for MNCs operating in Nepal.
How is Real Solutions helping companies in talent acquisition?
We go to colleges and universities and coordinate programmes that allow students to showcase their talents to potential employers and HR managers. Before organising such programmes, we spend some time in grooming the students so that they can demonstrate their skills properly. We also provide headhunting service. In case we don’t find potential candidates in Nepal, we even fill the positions by contracting managers from overseas.
What challenges exist for human resource management in Nepal?
Recruitment has become challenging due to the dearth of skilled workforce. Many in the workforce don’t know what skills even mean. There is too much focus on gaining knowledge only. In this digital age, people don’t need to store piles of information in their minds anymore. The mind needs to be kept fresh. The use of technology can inform us about anything anytime. We simply need skills to process that information. Academic institutions are also failing to instill skills in students.
Another challenge that has emerged lately is the mandatory provision in the recently endorsed Labour Act, 2017 which requires employers to monthly deposit 8.33 percent of the employee remuneration in the Social Security Fund as gratuity beginning from the date of appointments of staff. It applies for even staffs working under the probation period. As per the Act, probationary and contractual staffers are also entitled to provident fund from day one of their appointment. This will obviously increase the business costs which are already high due to the high employee turnover rate. Startups will bear the biggest blow in this regard.
There is also ambiguity in terms of performance appraisal. A company can fire someone if his/her performance is not satisfactory for three review periods. That means the government has hinted about both performance appraisal and hire and fire but how performances are measured and time period for performance review are not determined.
Nonetheless, from a different angle, tighter regulations will encourage companies to set up a separate HR department so as to timely handle compliance and avoid legal consequences.
I’ve heard about establishing a separate ministry for human resource that will look into both foreign and domestic employment. If it materialises, I hope it will change the situation in terms of formulating and enforcing HR rules, regulations and policies and skilling Nepali workforce.
What makes a HR professional? What are the skills needed to become a professional in HR?
There are only few seasoned HR professionals in Nepal. My guesstimate is around 25-30. For a HR professional, two basic skills are most important i.e. he/she will have to act both fire and ice based on the situation. They need to apply the carrot and stick strategy to motivate employees. By stick, I mean those initiatives that enable them to take corrective actions. Organisational culture can diminish in no time if HR professionals don’t keep a constant watch on how employees are behaving and don’t punish them when needed.
What is the status of succession planning in Nepal?
There is no retention strategy in a number of companies as they don’t have HR departments. So, there is no question of succession planning. Succession planning works if there is strong retention strategy. We need to just look at how people stick at the government/public sector jobs.
What are the strategies that Real Solutions has implemented to ensure employee retention?
In a survey conducted among 5,000 employees to understand why people leave, they reasoned that people leave a job to go to a company with better company culture. Employees ranked career opportunities and compensation and benefits below the overall rating of the company. We believe in similar lines that people prioritise organisations with better culture. We are a young organisation with an average age of 27.85 years. Our core working culture is maintaining fun at workplace and it’s instilled in our company values. We have anchored our career growth opportunity with in-house examples. For example, an office assistant who was with us in our early days now leads a department with 12 staff. We also offer a highly competitive salary package and follow a unique pattern of remuneration package where we distribute performance based incentives on a quarterly basis if they manage to reap benefits for the companies.
“Only 10 percent companies in Nepal are effectively practicing HR management”
How has the Nepali HR landscape evolved from traditional to modern form? What changes have you observed in the HR practices in Nepal over the last one decade?
The post-1990 period saw Indian MNCs and private sector banks begin investing in Nepal leading to the introduction of HR management practices, establishment of HR departments in Nepali companies and start of discussions and debates on various issues related to people management. When Growth Sellers was established in 2008, just around 55 organisations in the country had separate HR departments with 500 HR professionals altogether. We now have more than 500 institutions with HR departments and the number of professionals has reached over 1,300. Similarly, the administrative wings of the organisations are getting upgraded into HR departments.
Meanwhile, there has also been an upsurge in the number of professionals in Nepal with foreign academic background of HR management courses. Colleges in Nepal have also started offering specialization courses in HR management. It shows there has been a gradual realization of the importance of HR in Nepal.
Despite the developments, many organisations have not internalised HR as a core management practice. They view spending on HR departments and delegating authority to HR professionals are unnecessary. Due to the lack of resources and proper authority, HR professionals cannot give the intended results. Only 10 percent companies in Nepal are effectively practicing HR management at present.
What emerging practices have you been observing in the Nepali HR landscape lately?
The method of performance appraisal has changed. In the past, performance appraisals were mostly carried out haphazardly. Nowadays, different performance appraisal tools are used including 180 degree feedback and 360 degree feedback. Need assessments for trainings are carefully analysed, with a potential result in mind, before organising any staff training and development programmes.
IT has also become crucial in HR management now. Payroll management used to be managed by finance departments. Now, it is managed through HR software. Among the 500 plus institutions, around 25 percent of the companies use HR software. Many other HR related manual works are decreasing gradually too.
How is Growth Sellers fostering a good HR environment in Nepal?
Our sister concern Corporate Club Nepal has been organising the annual ‘HR Meet’ since 2007. The company for the last two years has also been organising the monthly ‘Excellence Series’ where HR teams from different organisations participate and discuss about the current practices in their respective organisation.
The Growth Sellers team advocates about the importance of HR department, on regular basis, at different organisations. We regularly conduct meetings with the decision makers. When a company approaches us for training, we advise them to allow us to carry out a need assessment for training first. Such assessments help us get effective result from the training and enable organisations to know the actual result of training and development programmes.
What other HR related services have you been providing to your clients?
Our company is comprised of three wings. Growth Sellers is the parent company which is engaged in recruitment, consulting, department outsourcing, and strengthening HR departments of organisations, evaluating employee productivity, department outsourcing, handling employee grievances and facilitating information about regulations to the companies. The outsourcing we do can be categorised as staff outsourcing and department outsourcing. Through department outsourcing, we manage the HR department of small companies and those companies which don’t have a separate HR department.
Growth Leadership Academy is another company that specialises in training and development programmes to enhance professional competencies. Corporate Club Nepal is another wing that organises events including Sales Summit, Management Conclave and HR Meet.
What external and internal sources have Nepali companies been utilising for the recruitment process?
The process of talent acquisition has changed. Headhunting is being used widely for hiring front desk officers to CEOs. Usually, for the post below managers, people apply through job applications. For higher positions, people don’t prefer going through the tedious process of job application. Rather, companies like ours are assigned with headhunting. We approach the candidates and communicate to them about the offer. If they agree, we send their CVs to the respective company for processing. All this takes place under high level of confidentiality. Nowadays, HR companies, corporate houses, individuals and startups are increasingly using Linkedin to find potential candidates.
Are there any difficulties Growth Sellers has been facing in providing its services?
In our formative years, people hesitated to give us time when we sought to pitch our idea. We have successfully passed that stage. At present, there is no regulatory body to govern the HR. We hope that the government will form a body to govern the HR-related issues.
What is the situation of succession planning in Nepali organisations?
Earlier, organisations avoided long term planning for their employees because they used to assume it involved costs. Nowadays, succession planning has emerged in large institutions. They plan for 5-10 years when they hire someone. As the young generation looks for growth and opportunity, succession planning should be practiced all over. Such planning should also be properly communicated to employees during their interview.
Usually what happens in many organisations is that employers convey big plans to the employees while hiring them but fail in delivering the commitments. Even employees make big claims during the interview but fail in performing. Both employers and employees should be ethical in making commitments and delivering them.
What do you think are some of the effective ways to retain people in an organization? What retention strategy has your organization been deploying?
We need to understand different dimensions associated with the workforce available in the market. Part of the workforce in Nepal is people from villages who come to cities for higher studies. They work to meet academic expenses and sustain livelihood and seek regular exam breaks and other type of leaves. When employers can’t afford to provide such flexibility anymore, such employees quit. Employee turnover is high among this segment of employees and it can be considered normal. Problem arises when the other part of the workforce who have already completed their studies terminate their employment. Worryingly, the turnover is high among this group of employees, both in Nepal and even worldwide. The rate of turnover at 10 percent is considered normal worldwide. But it is exceeding the normal rate at present. ruins the employees’ credibility and even the organisations suffer.
We conduct regular assessment of employee engagement, their remuneration and benefits and other HR-related practices. Salary plays an important role in people retention. It is one of the important elements because employees will not be motivated if they are not remunerated according to their work and potential. It affects productivity which in turn affects the employees’ career and organisational growth.
There are other factors as well that contribute to high turnover such as working conditions and environment, behaviour of the supervisor, lower career growth opportunity, few opportunities for exposure and underutilisation of capabilities. Unfortunately, they exist across our market.
What are the most important skills Nepali companies in general look for in the candidates while hiring?
It depends on the position of the staff. When companies are seeking employees for junior positions, they prioritise people with learning attitude and those who can be groomed. For the senior positions, companies look for skills that specifically meet the job description. Good attitude towards work is an inevitable requirement for both levels.
What are the most dissatisfying and demotivating factors for prospective candidates and staff of the companies in Nepal?
In many cases, it is the poor behaviour of supervisor that compels people to leave than the work culture or organisational behaviour. It is rightly said that ‘people don’t leave their companies but their bosses’, which is one of the reasons for high turnover in Nepal. Many people regard salary as the most important element for employee satisfaction, but work environment is equally critical. Factors like location of the work station and transportation facility also plays a crucial role in staff retention.
What value do you think HR departments can add to the overall organizational management?
Strengthening the HR department is not all about creating an HR department. It neither is about simply assigning the responsibilities of payroll management and organising training and development programmes. The HR department should also be given strategic responsibilities. Entrusting authority and responsibilities to HR departments may look costly, but it will reward the company later through employee satisfaction and motivation, reduced costs and enhances efficiency.
The HR team in any company should coordinate with the management team, focus on grooming their people, work on enhancing their productivity and manage succession planning. They should be able to bring the right people into the right department and develop effective succession plans for staff retention. If the working hour is eight hours a day and the people are actually being productive for only three hours, the HR management should be able to analyse such scenario at psychological level and work on improving it. It is the responsibility of HR departments to arrange proper exit of the employees and make them develop positive attitude towards the company even after their exit.
“Employee satisfaction and motivation essential for creating organizational value in the market”
How do you analyse the Nepali HR landscape?
It depends on the scale of organisation. Large organisations have already started practicing a number of employee incentives such as incremental salary, provident fund and gratuity, leave management, bonus distribution (as stipulated in the Bonus Act of Nepal), performance incentive plans and industry-average salary. These are A-grade companies like Surya Nepal, Bottlers Nepal, NCell, Unilever, Dabur Nepal, and Class A commercial banks of Nepal. They fully comply with Nepal’s laws. They hire entry level staff and groom them for higher positions providing career growth opportunities to them. Although Sipradi is a domestic trading company, I have observed these practices in Sipradi as well.
In other organisations, primarily domestic companies, many of these practices are missing, though some of them are trying to implement them and replicate the MNC culture. They seek quality workforce and focus on human resource development to certain extent and pay suitably but they don’t fully comply with national laws and human resource values. There are also a number of organisations that don’t understand the efficiency and effectiveness a separate HR department brings into business and consider providing resources to the HR department as unnecessary. Meanwhile, in few startups, the culture is expected to gradually grow. Presently, they are financially constrained to fully implement a comprehensive HR culture.
Organisations can’t create organizational value in the market without employee satisfaction and motivation. What they miss out is ‘if you keep your employees happy, they will keep your customers happy’. If you look at India, their focus on human resource development is outstanding. Perhaps it is because of their market size. We can at least replicate their level of seriousness in our own ways.
But what we are practicing is hire and fire policy when employees don’t perform rather than training them and enhancing their skills. Even top companies of Nepal are failing in motivating employees and failing to create their ‘employer brand’.
How have HR practices evolved in Nepal after the 90s?
Companies which were already there in the 90s or that came up during the 90s have come a long way. They have understood the value of human resource management in corporate success and replicated best international practices. Some of them, as I said earlier, are trying to replicate MNC culture.
Unfortunately, 70% of the companies still don’t care about employee motivation and focus only on sales and marketing. Becoming a ‘employer brand’ by cultivating HR practices that ensures employee satisfaction and employee friendly work environment is their least concern.
Companies that don’t think about effective HR practices are facing high turnover. Even senior management prefers to switch from these institutions after realizing their work culture despite their big names.
One factor contributing to high turnover in organisations in the last few years is the availability of choices that were previously unavailable for good employees. Organisations no more have that ‘cushion’ where they could feel that their staffers don’t have any other option. The current trend is that many organisations are always on the hunt for good employees.
What has also exacerbated the turnover is brain-brain. At present, those who have talent and passion don’t confine them within Nepal only and don’t hesitate to explore international opportunities. In such scenario, if the HR culture is obsolete or restraining to employees, employee retention will become difficult and organizations will suffer.
What are the HR trends and practices triggered by technological development?
Today, the entire employee history from recruitment to retirement is recorded in the Human Resource Information System (HRIS). Their management from salary deposit, PF and gratuity handling to leave management are done through HRIS. It has simplified HR management. A large number of employees can be handled through HR software using less HR professionals. Use of HR software has become one of the key trends now among large corporate houses. Even performance is measured in quantitative terms even when there are qualitative outcomes. Yet manual ways of doing things hasn’t lost its use in Nepali organisations.
How has been the journey of Froxjob since its establishment?
We started as a recruitment company which is our specialization. Top and senior management headhunting is another service where we are really good at. At present, we deliver all HR-related services - from payroll management (or staff outsourcing) to providing consultancy services for HR policy formulation and implementation. We have a different department for training and development as well.
Talking about our process and system, we have our own database system where we have stored all the incoming CVs. We are currently outsourcing more than 1,000 staffers for different organizations that we hire through our database and manage through our HR software. We have 11 recruiters across the country that compile documents from potential recruits and send us for processing. We have also set up a branch in Chitwan to expand our outreach. We take ‘people to people’ approach while recruiting. Our recruiters talk directly with the potential recruits rather than communicating through social media and internet portals.
As an employer, we provide all the necessary perks and benefits to our 30 staffers that include bonus, performance schemes, PF, gratuity and insurance. We follow growth and payment system while remunerating our employees.
What are the other means implemented by Froxjob for recruitment?
We have conducted 3-4 university recruitment programs. Six months back, we facilitated one such program in Tribhuvan University, in coordination with their students’ council, for their MBA students where around 15 businesses participated. Previously, we had conducted such programs at Uniglobe College and Global College of Management.
We also conduct a college campaign namely ‘Meet the Recruiter’ where our recruiters conduct interviews with students and fill in the vacant positions at businesses. We have held the campaign at Ace College of Management and People’s Campus. We believe that as a recruiter we must go the market and connect new job entrants with employers.
Even with such events and campaigns, it is difficult to find prospective candidates as they lack skills sought by the employers.
What do you think are the major accomplishments of Froxjob?
Firstly, we are bridging jobseekers and job providers. We believe that by bridging the gap between employers and potential employees, we have contributed to reducing the outbound workers to a certain extent. Secondly, we also contribute to the national coffers through VAT implementation and TDS.
How are organisations using recruitment agency services?
When organisations need a quick service, they look forward to receiving professional HR agency services as we have a repository of CVs stored with us. It’s a tedious and time consuming task to process 300 applications for a single position for them. The likelihood for finding the best candidate is not always there. It doesn’t make sense to go ahead with such trial and error. When organisations need the supply of a large workforce, we are the only ones who are equipped to handle such assignment. In such cases, recruitment companies have become a reliable source of HR supply and the trend shows that.
With headhunting senior management staff, our experience is that senior management staffers don’t throw their applications everywhere. They have their inhibitions because they don’t want to be seen applying and rejected later. HR companies track them down based on client requirements.
What are the challenges Froxjob is currently facing?
The Labor Act, 2017 was endorsed a few months ago. Although it doesn’t touch upon the other functions of HR companies, it has prescribed a clause relating to recruitment or outsourcing function of HR companies which seems pretty ambiguous. As per the act, we aren’t allowed to deal with more than two types of services. It doesn’t seem clearly defined.
Anyways, limiting HR companies in such a way is like limiting a bank to lend to only two areas or sectors. Organisations like us can’t survive if we aren’t allowed to explore our full portfolio. But that is all about the Labor Act. We can’t amend it anytime soon.
The draft regulation within the Labor Act has come out even more aggressively and is almost impossible to achieve. If the current draft is introduced, HR companies will be required to deposit three months' salary as advance security deposit for every staff outsourcing they do. We will also be required to pay Rs 1 million as licensing fee and a further Rs 200,000 for each type of service we want to provide. How can HR companies sustain with such a regulation? The government seems to be making way for HR-related MNCs, the only ones that can comply with such regulations.
In the international arena, the government itself is one of the major clients of HR companies. Here, the government is rather demoralising us. They are blaming that HR companies are drawing huge margins out of the outsourced staff salary. May be it is the case with some companies who are not registered within the government framework and even evade taxes, but not all follow such business malpractices. The government shouldn’t introduce regulations that will impact the entire sector just because few are engaged in malpractices. Rather it can monitor, on a quarterly basis, how the contracts are being implemented and whether the committed salary and benefits are being paid out or not. We are in talks with the government officials concerned and they are positive so far.
What do you think is the preferred sector among the potential recruits?
Government jobs were and still are the most preferred. The problem with it is its lengthy and cumbersome process, the need to make multiple attempts due to large applications and its connection with nepotism and favouritism during the recruitment.
Earlier, banking was highly attractive. It is gradually fading now because there are other employment providers who pay and care for their employees more than the banks do. People have started realizing that there are career growth prospects in other sectors too.
How are companies exercising succession planning?
As I said earlier, succession planning is highly valued in grade A companies. They groom new job entrants in ways that they will later take charge of managerial positions. In other companies, succession planning is yet to be seen. Some of them are gradually realising its importance because it’s difficult to find replacement when a senior manager suddenly decides to resign. It is better to promote someone who already understands the work process, network and culture. By doing so, the employees will sense both confidence and responsibility that the organisation rests upon them. Despite its importance in businesses, most organisations across Nepal are found to have ignored succession planning.
What are the effective retention strategies that organisations should focus on?
Why people leave is a critical issue to understand. Businesses and professionals have their own targets to meet. Much of their focus lies on meeting those objectives. People who work under them have their own priorities which normally include their family, circle and culture. Organisations must value their peoples’ other responsibilities and commitments. Organisations should also keep a watch on how the seniors treat and motivate them. They should understand that people’s happiness doesn’t lie in financial incentives alone. Appreciation of work through rewards, fun work environment and removal of unnecessary hassles are a few motivations that employees seek.
Also, there is the lack of clearly defined job description and key performance indicator (KPI) for employees. The lack of clarity leads to confusion on what is expected from employees and managing their performance. Devising career growth opportunities is also a crucial retention strategy. Succession planning ensures that employees see future growth opportunity within the organisation. Once that is sensed by the employees, they will become more proactive and keen to take higher responsibilities.
What are the most important skills Nepali companies in general seek among the candidates while hiring?
Among senior management staff, organisations are seeking leadership skills with a hope that they will steer the business ahead. In many cases, despite having substantial experience, senior staffs are missing dynamism to lead the younger generation, which is equipped with modern skills, adaptability to technology and international degrees. This is why finding employees for senior position is difficult and we have to depend on Indian consultants.
This is where management development comes into the scene. Management development is a process by which top level employees are provided strategic skills like analysis and team-leading. But that is missing in Nepali organizations. At lower level, communication skills and attitude to perform is lacking. There is dearth of people who can understand product knowledge in a simplified way and communicate about it properly. Business schools are providing strong theoretical background but failing at harnessing skills based on market needs. There are people who lack depths in using excel, power-point and ms-word. Business schools or any other colleges should act as a bridge between skill enhancement and market needs.
“Retention policies work best when the working environment is good”
What is the situation of HR practices in Shanker Group?
After my appointment at the company, we conducted a study on the existing situation of the company which concluded that the existing system was not effective. We started practicing new trend in the human resource management to add systematic and fair recruitment process, participatory decision making, effective communication, training and development programmes for employees, performance management system and retention strategies. Improvements are being made on day-to-day basis and we are catching up with the new HR techniques and tools.
How does Shanker Group ensure that its employees are always happy and satisfied with their work?
It doesn’t matter what we build, invent or sell. Any organisation can’t move forward without better management of people. Happy and satisfied employees are more productive, better leaders, more creative and efficient team players. A company’s retention data determines the level of employee satisfaction. At present, Shanker Group’s employee turnover rate is less than 2 percent. High attrition means employees are not satisfied. We conduct employee engagement survey once or twice a year to find out if our employees are satisfied or not. These surveys show that staffs are satisfied and that there is good coordination between the employees and the HR department.
We ensure employee satisfaction by being flexible while dealing with them. People working at Shanker Group also receive recreational time. Our employees recently engaged in managing the Everest Premiere League (EPL) cricket competition. They were also engaged in creative painting and other recreational activities. We organise activities that engage both employees and their family members.
What kind of performance evaluation method have you been using? How is the performance appraisal in yourorganization linked with remuneration increment, rank promotion and incentives, etc?
We use Key Performance Indicator (KPI) and Key Result Areas (KRA) for performance appraisal. KPI is used for top-level managerswho are assigned targets and is the basis for their quarterly, half-yearly or yearly evaluation. Based on the evaluation, we give them chance to improve on their weaknesses and productivity. On the other hand, we use360 degree feedbackto evaluate the performance ofthe rest of the employees. For ground level staff like janitor, drivers and security guards, we conduct competency-based appraisal that evaluates their technical skills required to perform the assigned tasks.
Salary increment is directly proportional to performance. We have a predesigned score to determine remuneration increment. We consider 90 or above weightage as outstanding performance and employees with such performance levels are entitled to more than 30 percent salary increment. On an average, ten to five percent of our employees perform exceptionally well. Anyone below the rating of outstanding performance gets an increment ranging from 10 to 30 percent. The minimum rage of increment will be considered based on the current inflation rate of the country.
Despite their performance levels, we believe in constantly motivating them because they are our assets. We don’t believe in firing employees immediately; instead we believe in grooming and training them. We focus on skill development for lower level staff and leadership development for senior employees.
What value the HR department has been adding to the overall organizational management of Shanker Group?
Actually, HR departments are strategic business partners for any organisation. We follow the concept of right people in the right place at the right time to ensure success of our projects. As finding skilled people is challenging, we are focused on setting up long-term plans for employee management.
What do you think are some of the effective ways to retain people in an organisation? What retention strategy has your organisation been deploying?
Employee retention begins with the job interview process. We’re not talking about making a good first impression, though that’s part of it. At Shanker Group, when an employee is hired, s/he is inducted during their initial days. We havea large number of employees and it takes time to know all of them at once. Induction helps in grooming them, developing a sense of ownershipin them and providing comfortable environment to begin work in a new place.
We also thrive to develop mentoring and coaching skills in our staff so that they are able to inspire and motivate their subordinates. Proper guidance from the supervisorsto new employeesis another motivation for employees. Training and development follows later as employees start to settle in. Even while leaving the company, easy settlementsends out a positive message about the company. Bonding outside the office through team lunch creates a positive ripple in companies. Retention policies work best when the working environment is good. Recognition, flexible work arrangements, work-life balance, employee engagement, health and safety, communication, workplace diversity, formal wellness programmes, inclusion and employee development, self-learning activities, reward and recognition, appreciation culture are some examples of approaches that can become a part of the mix while developing retention strategies.
What are the external and internal sources that have you been utilising for the recruitment process?
Shanker Group works in more than 16 sectors and 33 companies are operating under the Group. We are directly engaged with 10 companies at the moment. So, hiring is a challenging job for us. We hire through every possible medium like advertising in newspapers, magazines and online media and outsourcing through recruitment companies. We have been outsourcing most of the supporting service related tasks other than the main production. We reach out to major outsourcing companies for headhunting, but do not engage in unethical practices like employee poaching. But when applicants from another companies voluntarily apply for the vacant positions, we let them compete in the selection process.
What are the most important skills Shanker Group in general seeks among the candidates while hiring?
We seek manpower equipped with specific skills and knowledge for specific fields along with common soft skills. We also analyse whether the person will stay for longer period with us or not. In the present context, except for ground level staff, all employees are expected to have the basic computer proficiency, soft skills like positive attitude, communication, interpersonal and negotiation skills in spite of the knowledge of specific areas of their assignments. They are also expected to properly manage their time. As experienced manpower is not easily available in the market, we also prefer qualified fresher with creative and learning attitude and work on ways to develop their skills, knowledge and working attitude as per our company’s requirements.
What major challenge have you observed over the years in terms of HR management for business groups like yours?
Behavioral problem to adjust with change is one of the main challenges. Another challenge is to change the traditional mindset of employers to comply with emerging HR practices. Many seem indecisive in investing on strengthening human capital as they feel such investments will not be useful after an employee resigns from the company. Contemporary HR professionals still struggle to change the mindset of employers who tend to prefer operating business and cannot go beyond traditional approaches. Chances are that there will be reluctance to change. Employees working for a decade or more are accustomed to the traditional practices. They will find it difficult to accept technological changes introduced by the new generation. For instance, we use Enterprise Resource Planning (ERP) software in our company but some of our old employees don’t have adequate knowledge to use computers. Our focus is on striving to train them and make them aware about its importance and benefits.
What are the most dissatisfying and demotivating factors for prospective candidates and staff of the companies in Nepal? How do you think these issues can be addressed?
Low salary levels, late salary disbursement along with lack of remuneration increment, dim career growth opportunities, absence of decent work culture and perception of fairness and equitable treatment in workplaces are some of the factors behind employee dissatisfaction. Companies should consider performance-based increment that is fully fair, transparent and participative. Besides these, employee engagement, personal counseling, coaching and mentoring can play significant roles to avoid problems.