Dalits comprise an insignificant portion of white-collar jobs in Nepal’s corporate houses. In 2023, the Federation of Nepalese Chambers of Commerce and Industry and International Finance Corporation jointly published a study report, “The State of Private Sector in Nepal: Contributions and Constraints,” which credited the private sector for 85.6 percent of the country’s employment. Although the report did not produce caste-disaggregated data, Nepal’s socio-economic makeup is sufficient to reveal the Dalits’ situation in the private sector. Nepal’s employment policies secure quotas for Dalits only in the public sector, with just 14 percent of jobs.

There has been limited enquiry on this issue, and hardly any private sector employment and business study report discusses this. Worse, the country does not produce caste-disaggregated data on employment in the private sector. This absence of data and related literature in a country where most state apparatus operates on caste-based values and norms speaks volumes about Dalits’ exclusion in private workplaces.

International practices

The United States, Canada and India have adopted policies to include marginalised and minority populations in the private sector. The Civil Rights Act of 1964 and the Employment Enquire Act of 1995 secure equal opportunities for the minority and marginalised population in the United States’ and Canada’s private sector. In 2007, India formulated the “Voluntary Code of Conduct for Affirmative Action” to promote inclusion in the private sector, and by 2019, 19 percent of the total 17,788 member companies of industry chambers adopted this code. Although these countries need to progress on private sector inclusion, their efforts are noteworthy as they recognise the importance of inclusion and diversity.

The 2017 Country Report by the US Department of State categorically comments that labour discrimination generally took the form of upper-caste men without disabilities being favoured in hiring, promotions and transfers in Nepal’s formal sector. Our everyday experience of how businesses primarily recruit their relatives or through references within their network without following merit-based hiring processes supports this fact. Moreover, customising vacancy details to suit a particular candidate within a familial or social network is widespread.

The private sector often dismisses affirmative action in their companies. A senior Human Resources professional argued, “The private sector is for profit, and it prioritises efficiency over diversity.” She further rationalised, “private sector needs to apply merit-based hiring process to attract the best minds in the market.” An investor commented, “Affirmative action can diminish productivity through compromises on skills and talent.” Although the sector insists they look for talented candidates, there is hardly any evidence.

The private sector isn’t alienated from social structures and conditioning as those employed also carry social prejudices, influencing their decisions and actions. In our context, bhan-sun is a primary determinant for employment access, especially in the private sector, as they lack proper human resource policies and practices. Hence, recruitment in such a sector takes the form of nepotism, which hinders or facilitates specific caste’s access to jobs. A person’s familial or social networks yield accessible roads to opportunities. The status group enables a particular choice of candidates, and the chosen ones further select similar group members. Thus, it becomes an impenetrable circular phenomenon that is not just limited to unfair hiring but also extends to easy access to information and resources.

The private sector’s pool of workers becomes a homogeneous population with such practices, limiting Dalits’ entry. An “aberrant person” is perceived as an “outsider” and goes through unsuccessful attempts in the recruitment process. Thus, a candidate from a marginalised community gets a narrow “margin of error” compared to dominant groups. The position becomes adverse as the greater the degree of marginalisation, the more significant the exclusion.

“Caste preference is an open secret in the private sector,” says Advocate Yamkumari Dadel, a human rights lawyer and Dalit activist. Sukhadeo Thorat, an Indian economist, conducted a correspondence study of labour market discrimination in India. He found that members of certain socio-cultural groups are excluded because of their group identity, like caste, ethnicity, religion, gender, colour and race. In his experimental research, two individuals of different caste identities with the same education, experience and training were treated unequally by hiring managers in the private sector.

However, hiring managers do not understand that the private sector does not benefit from its caste-based preference in the selection process. Nepotism downgrades meritocracy through favouritism, undermining skills development and motivating workers to focus on networking or chakari. It also removes space for workplace diversity, which is essential for creativity, innovation and cultural awareness for business growth. Furthermore, companies are unable to exploit a larger talent pool by alienating a significant population out of competition. Such exclusionary practices eventually hinder a company’s economic prosperity.

Corporate social responsibility

The private sector cannot be isolated from their social obligation. They usually claim their Corporate Social Responsibility (CSR) programmes serve the communities. However, their CSR initiatives have not contributed to empowering marginalised population like Dalits. A 2021 CSR Report by Nepal Rastra Bank found that 69.8 percent of banking and finance industries carry out CSR activities to “build an image”. Such intention cannot ensure social accountability and give jobs to historically marginalised communities in the private sector.

It is high time that the private sector takes serious measures to promote Dalit inclusion in their companies and promote social justice through socially responsible business. They should voluntarily hire more candidates from marginalised groups such as Dalits, adopt inclusion and diversity as one of their corporate objectives, and publish diversity quotients in their annual reports. Furthermore, stringent workplace policies and redressal mechanisms should be formulated to address caste-based discrimination. The private sector umbrella organisations such as the Federation of Nepalese Chamber of Commerce & Industries must take the initiative in practising caste-based inclusion and produce data to that effect. The private sector’s efforts in inclusion and diversity can help achieve substantial progress in meeting the 2030 Agenda for Sustainable Development Goal (10), which targets reducing inequalities.