ILO-NEF Dialogue Series on Transforming the Workforce for the Future Series I: Enhancing Produc@vity, Enhancing Growth
Proceedings Report 11 September 2019
Introduc@on This session, Enhancing Produc.vity, Enhancing Growth, delved into some of the crucial factors that contribute to enhancing the produc<vity of the workforce, including legal mechanisms, be@er wages, suitable and secure working hours and environment, consistent availability of work, necessary incen<ves and on-<me payment of wages. It also discussed labor produc<vity in the sectors that are important for Nepal to achieve its development goals and further explored the measures to address the exis<ng challenges that are obstruc<ng labor produc<vity. Addi<onally, the session looked into the impact of the Social Security Act on produc<vity of the workforce - providing recommenda<ons to the private sector and iden<fying the legal/ins<tu<onal impediments that need to be resolved.
Speakers:
Anup Raj Upre@ Managing Partner, Pioneer Law Associates Damayanthi Joshi Head, Human Resources, Nepal SBI Bank Limited Kabindra Nepal Under Secretary, Ministry of Labour, Employment and Social Security Shailendra Raj Giri Managing Director, merojob
Moderated By: Sanjib Subba CEO, Na<onal Banking Ins<tute Ltd
Anup Raj Upre@
Managing Partner, Pioneer Law Associates Having prac<ced commercial law for over twelve years, Anup Raj Upre< took the stage to talk about the overall employment laws in Nepal. He men<oned that there had always been disputes between employers and employees in Nepal. However, in recent <mes, the Government of Nepal has introduced new regula<ons with regard to labor and employment which has helped to tackle the exis<ng problems. In the context of Nepal, employers had always wanted flexibility whereas the employees had sought job security. From an employer’s perspec<ve, there has always been the need to dis<nguish between a performing and non-performing employee. If one is not able to differen<ate between a performer and a non-performer, it would be very difficult to encourage a produc<ve working environment. He stated that as per the law, 10% of the net profit needs to be allocated as bonus. However, the distribu<on of bonus is done on a default basis which does not encourage improvement in produc<vity. In addi<on, he stated that the absence of legal provisions to
terminate the services of the employees on a performance appraisal basis is another important issue. At the same <me, he opined that the new regula<ons had also brought in posi<ve changes for the employers. The regula<ons have given employers the needed flexibility in terms of hiring, they can now hire on a <me-bound basis. To illustrate, he spoke about the banking sector where the banks can define their own code of conduct from a termina<on perspec<ve a\er ge]ng the central bank’s approval. From an employee’s perspec<ve, being part of the social security fund is going to give a sense of security to them. Whether the employee is a part-<me or a fixed-term or a regular employee, he or she is en<tled to the same benefits from the day of joining. However, he emphasized that the fund needs to take into considera<on the needs of the employee. Moreover, the fund also needs to differen<ate between SMEs and big industries. Given these issues, he highlighted that the problems with the regula<ons exist in the implementa<on and not with the law itself. Though there might be some loopholes with the law itself, he stressed that it can be improved with <me and experience.
Damayanthi Joshi
Head, Human Resources, Nepal SBI Bank Limited Damayan< Joshi brought in a banker’s perspec<ve into the discussion. She conveyed that the reason why the banking sector has been successful in bringing in huge profits in comparison to other sectors was due to their different approaches towards produc<vity. For her, produc<vity, on a stand-alone basis cannot only depend on the human factor, as a person who is really produc<ve in one organiza<on may not be produc<ve in another. Similarly, she men<oned that the banking sector contributes to around 25% of Nepal’s GDP. This has been possible due to the various employee engagement ac<vi<es where a systema<c approach to leadership training and development process has been adopted. This has further boosted the produc<vity of employees at the banks. In addi<on, the sector has also been successful in increasing its produc<vity because of its welldefined synergy between human capital, work environment, and technology. Along with this, their ability to be at par with the current wave of globaliza<on and wide flow of new technologies has further augmented its yield.
However, she also spoke about the exis<ng issues in the banking sector, among which the instability of land laws, social security and the gap between the millennials and the older genera<on is challenging. In this context, she said that social security has actually been crea<ng chaos for the sector. Likewise, the disparity in terms of how the older and younger people perceive produc<vity is also ge]ng enlarged. As the younger genera<on is not as pa<ent and is highly ďŹ&#x201A;exible, they do not wish to wait for a long period before their pension or re<rement scheme starts to roll in. Whereas, the older genera<on is rigid and is ready to wait as per the required <me before u<lizing their re<rement funds. Although deemed as an organized sector, such impediments have restricted the advancement of the banking sector. Hence, it is cri<cal to ensure re-skilling and re-engineering of employees at banks or else their produc<vity would not be sustainable. Lastly, she stated how the employees in the banking sector seek more recogni<on and apprecia<on than a huge remunera<on. She emphasized that providing the highest pay does not ensure produc<vity, and experience a\er a certain <me could turn obsolete. Hence, more focus has been diverted towards job sa<sfac<on and employee acknowledgment to upgrade the overall produc<vity of this sector.
Kabindra Nepal Under Secretary, Ministry of Labour, Employment and Social Security Kabindra Nepal spoke from the ministerial perspec<ve about the exis<ng labor market scenario in Nepal. He highlighted the main provisions that the Cons<tu<on has granted - the right to decent work opportuni<es, labor, and social security. Such provisions have been classified as our fundamental rights. Likewise, different provisions have also been classified for migrant workers to make their transi<on in a foreign land safer and secured. According to him, the most vital element that goes into building a good employer-employee rela<onship is the removal of labor exploita<on. Bonded labor, child labor, and commercial sexual abuse are the most common types of labor ill-treatment in Nepal. To tackle such hurdles, the ‘Labor Act’ has been segregated to a different branch - the ‘Child Labor Act’, to look into such ma@ers and resolve them. Similarly, he also men<oned that the issues of labor employment and social security are directly linked to skills and human resources. Thus, to boost human capital, the ministry has been engaged in various ins<tu<onal and construc<onal
reforms such as the â&#x20AC;&#x2DC;Prime Minister Employment Programmeâ&#x20AC;&#x2122;, which aims to inculcate greater skills and capabili<es among laborers in the labor market. He also elucidated upon the fact that any organiza<on's produc<vity is not only linked to its laborers, in fact, technology, structuring and organiza<onal consul<ng play a huge role. To enhance the overall produc<vity of an establishment or to catalyze it, proper implementa<on of the legal framework in regard to its ins<tu<onal culture is a must. By ensuring this, the spill-over beneďŹ ts from one ins<tu<on to another or from one sector to another can also be secured. This, in turn, expands the overall produc<vity of the na<on. Further, he addressed the need to ensure that any kind of improvement in the labor market has to be in accordance with the Sustainable Development Goals. What Nepal is currently undergoing is the opposite of a demographic dividend and in case of its con<nua<on, Nepal would be a country of re<red people by 2047. Such a rapidly aging country places a huge burden on the availability of social security. Hence, there is a dire need to skill or re-skill the aging genera<on in order to keep their produc<vity at an op<mal level. Lastly, he deliberated upon the fact that the younger genera<on or the youths are the ones who are the future pillars of the na<on. If the current large-scale migra<on of the young popula<on for employment and educa<on con<nues, development or growth on the domes<c front cannot be achieved. Instead, youth should be catered with enhancing and challenging opportuni<es in Nepal so that their exper<se can be u<lized.
Shailendra Raj Giriâ&#x20AC;¨ Managing Director, merojob Shailendra Raj Giri underscored the importance of awareness among the employer and employee, about their respec<ve works, in serving as one of the most essen<al factors in produc<vity. He stressed the role of the government in sensi<zing both par<es so that they can be@er match the changing future of work and the ongoing technological disrup<ons. The skills that were needed in the past and the kind of employees who would perform those tasks are no longer suited in the current economy. Thus, to bridge the gap between the skills required today and that is going to be required in the future, the government has to intervene and prepare the workforce for the future. Further, he addressed the problems in the current job system where an employer only looks at the job market from his/her point of view because of which the inten<on of the work and interests do not align. The employees, today, want to contribute to the organiza<on they are working in while also feeling dis<nct and recognized. On the other hand, employers do not respect their workers. In the context of this non-
alignment, an employee who is not interested in the work assigned might get hired, leading to loss of focus and produc<vity at the workplace. To address this, he believes that the government has to conduct surveys regarding interests, skills, knowledge, and a]tude and, communicate it largely to concerned stakeholders so that highly produc<ve people can be created for the future. Besides, certain professions which are most required in the country also have to be conveyed. Likewise, he emphasized the strategies used by certain employers that harm the overall work environment of the na<on. Some employers provide payment below the minimum standards to the employees and further delay the payment process, thus, demoralizing the employees. Consequently, the employers also lack focus on building the culture of the company. Instances like unethical recruitment leading to wrong selec<on of an employee cause him/her to begin his/her career with low morale. Addi<onally, if the working condi<ons and culture of the company are not parallel with the demands of the employees, they cannot become produc<ve. Even if the company makes a profit in this way, it cannot retain these people. All of this eventually pushes the employees to believe that the na<on cannot create a suitable work environment for them and to opt for op<ons like leaving for abroad. Thus, a lack of understanding between employers and employees, and developing wrong strategies that only benefit one party singly restricts the overall upli\ment of the work environment in the country. Lastly, he explained that while developing organiza<onal strategies, measurement and quan<fica<on of produc<vity also has to be kept in mind. Produc<vity is not reflected in terms of profit or revenue collected by par<cular departments only. This is why, first and foremost, key result areas have to be targeted and measurement, in terms of the number of employees deployed to complete the task and the number of hours spent on comple<ng the task, has to be done. Addressing the aforemen<oned challenges in the workplace and quan<fying produc<vity in this manner can enhance overall labor produc<vity of the workforce and bring in desired growth for the economy.
Sanjib Subba CEO, Na@onal Banking Ins@tute Ltd Sanjib Subba, the moderator of the session, floated the discussion mostly around the need for measurement of produc<vity and the role of private as well as government sector in minimizing the challenges related to enhancing produc<vity. He also delved into the role played by strategic tools like Social Security Act and stressed the need for more ini<a<ves from the government. As for the private sector, he believes that the lack of work-life balance is the major cri<cism of the industry and thus, has to be explored in terms of the nature of the changing workforce, job sa<sfac<on and its effect on produc<vity. Highligh<ng the issue, he also touched upon the fact that the number of the workforce has shi\ed from the agricultural sector to the industrial and service sectors. With the paradigm shi\ and rapid urbaniza<on, employers have to put in efforts to look at the job market from both perspec<ves and link employee produc<vity with employee engagement and mo<va<on. Further, he touched upon the need to keep the
of labor at the center in order to create an enabling environment where employees are valued and respected in a way that enhances produc<vity.
Key Highlights: •
Labor produc<vity has to be measured and quan<fied.
•
Recas<ng discourse from both the employees and employers’ perspec<ve is the need of the day.
•
With the transi<on in the workforce from agricultural to industrial to service sectors as well as the new genera<on joining the workforce, efforts to address this effec<vely has to be explored.
ANNEXURES
ANNEX 1: KEY TAKEAWAY
The government has a wider reach and larger impact on sensitizing people, therefore, there is a need for the government to come up front and conduct a survey on the types of skills required in today’s market and the methods to bridge the skill gap. Industrial partnership with universities is needed to create an alignment between what the industries want versus what the academia can produce. To enhance labor productivity or to catalyze it, effective organizational consulting, availability of advanced technology, and, capable human resource is a must. The disparity in how the old millennials and the new millennials perceive productivity is huge. Thus, sectors need to re-engineer themselves, and rearrange their processes to bridge this gap and achieve sustainable productivity. Productivity will increase with the synergy between the human capital, work environment and technology. Bigger pay does not guarantee higher productivity, instead, it is driven by better recognition, growth opportunity and work experience. Mechanism to distinguish between a performer and non-performer for the purpose of incentive distribution is a must to increase productivity. Employers have to contextualize things from the employee’s point of view and understand their need. That will resolve many issues.
SN 1 2 3 4 5 6 7 8 9
ANNEX 2: REGISTRATION SHEET Name Abishek K Acharya Aditi Adhikari Alpa Shakya Anant Tamang Anup Raj Upreti Anurag Pokharel Anushree Tamrakar Anustha Shrestha Arjun Kharel
Organization Chaudhary Group GoNepal/Beed Beed Pioneer Law Associate ISET-Nepal Huawei Technologies ISET-Nepal CESLAM, Social Science Baha
Designation Assistant Manager Director Consultant Managing Partner Consultant HR Manager Researcher Research Coordinator Advisor - Planning, M&E and Economic Research
10 Ayush Siddhi
GIZ
11 Barun Kumar Jha
Government of Nepal Ministry of Labour, Employment and Social Security (Department of Labour & Occupational Safety Occupational Safety and Health Center)
Project Chief
GEFONT Srimar Law
Advocate Advocate
German Embassy Nepal SBI Bank Pioneer Law Associate
Research Assistant Head - Human Resources Department Trainee Associate
NEF Strengthening Systems for Social Protection and Civil Registration Project- World Bank MOLESS International Labour Organization (ILO)
Fellow
12 13 14 15 16 17 18 19
Bhakti Ghimire Bhakti Ram Ghimire Binija Nepal Clara Nicolai Damayanthi Joshi Dipti Sapkota Hom Gaire Ishan Bista
20 Jasmine Rajbhandary 21 Kabindra Nepal 22 Nabin Kumar Karna
Team Leader National Programme Coordinator
23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
Narayan Chaulagain Narottam Aryal Nasala Maharjan Niraj KC Prazol Sapkota Priyanka Chaudhary Raju Tuladhar Ram Kumar Rayamajhi Rashmi Kharel Karmacharya Richard Howard Rojesh Bhakta Shrestha Sadikchya Singh Saloman Rajbanshi Samita Shrestha Samridhi Pant Sanjay Pokharel Santosh Sharma Sawar Basnet Shraddha Ghimire Shreemanjari Tamrakar Srivasa Pradhan Shailendra Raj Giri Shanker Pandey Sudip Bhaju Sujeev Shakya Suvekshya Shrestha Swechhya Bhattarai Swechhya Rajbhandari Udgum Khadka
GIZ King's College NEF NEF Beed Beed Beed NPC KISAN II Project ILO Beed Beed ILO GoNepal Beed NIPoRe NIPoRe Independent Consultant NEF Beed Beed Merojob
Deputy Chief Technical Advisor President Fellow Coordinator Consultant Fellow Consultant
Beed Beed/NEF Practical Action Independent Consultant King's College King's College
Consultant CEO Officer - People and Culture Independent Consultant Project Coordinator Educational Development
HR Executive Director Consultant Consultant Program Officer Consultant Research Assistant Co-Chair Independent Consultant NEF Fellow Consultant Intern Managing Director