Firms' spending on employees 'low'

KATHMANDU:

Private firms in the country are spending too little on employee training ‘due to lack of awareness on the value of human capital’, a survey conducted by the National Banking Training Institute (NBTI) shows.

International firms, on average, spend around seven per cent to eight per cent of their total employee expenses, including salary, allowance and benefits,

on training per year, NBTI CEO Sanjib Subba told the Third National Human Resource Conference organised by the Human Resources Society Nepal in Kathmandu today.

“But here even firms with annual turnover of Rs 700 million to Rs 800 million

are found spending no more than one per cent of their total employee expenses on training,” Subba said without disclosing details of the survey.

He further said: “One commercial bank was even found allocating mere Rs 200,000 for training a year.”

One of the reasons for low spending on employee training, according to Subba, was lack of awareness on the value of human capital and infancy of human resources (HR) departments at private firms.

“Many firms here do not have HR department and even those that have are busy doing works like preparing salary lists, which actually could be outsourced. So officials in these departments do not have time for innovation, which can add value and support the company’s growth,” Subba said.

“Also, firms here are more concerned about cutting cost. And they do so without considering the value that trained staff members can bring to the organisation.”

Yet this does not mean progress is not being made, Subba quickly added. “Firms that earlier did not have HR department now have such wings. I am sure more power and authority will be delegated to them in the days to come,” Subba said. “But for this to happen employees working in HR departments should also be proactive and convince their bosses that better management of employees will push up sales, enhance productivity and ultimately increase profitability.”

CEO of Unilever Nepal Srikanth Srinivasamadhavan also agreed that overnight changes in functioning of firms cannot be expected.

“It is a slow process. But changes are inevitable and they will happen,” Srinivasamadhavan said.

He also urged officials working in HR departments to ‘right-size the organisation’ by finding right talent, skill, structure, cost and time.

“Also, officials working in HR departments should make proper use of technology to simplify processes and create agile working environments to increase productivity and promote creativity,” Srinivasamadhavan said.

“Besides, it is also essential to embrace the philosophy of ‘power of one but strength of many’ by respecting contribution of every employee in the firm and encourage outsourcing, whenever and wherever possible, to accomplish better results.”

Source: THT