Recruiting firms face a bleak futureScores of foreign employment recruitment agencies have run out of business and many other are making heavy layoffs due to recession in overseas employment, while a few big companies previously limited to hiring business are gradually exploring other avenues for investment.
Scores of foreign employment recruitment agencies have run out of business and many other are making heavy layoffs due to recession in overseas employment, while a few big companies previously limited to hiring business are gradually exploring other avenues for investment.
Despite healthy demand for both skilled and unskilled workers, fewer Nepalis are leaving for overseas jobs in the recent months particularly due to low income and rising processing costs.
With several countries in the Gulf struggling with economic downturn due to falling oil prices and Malaysian ringgit performing poor against dollar, stakeholders in Nepal are apprehensive about future in overseas employment.
“With few exceptions, recruiting agencies have cut down on their staff. Most of them are even struggling to maintain their operational costs,” said Tanka Raut, operator of Pigeon International, a recruiting agency that sends workers to Gulf and Malaysia. Nepal Association of Foreign Employment Agencies (Nafea) estimates as many as 5,000 people working for various recruiting agencies have been made redundant since the earthquake last year.
Raut, who is also the former vice-chairman of Nafea, an umbrella body of 752 recruiting agencies in Nepal, said that the slump in hiring of Nepali workers this year may continue in the coming years due to adverse circumstances both at home and abroad.
According to the Department of Foreign Employment, a total of 95,193 Nepalis left the country for overseas jobs from mid-July to mid-October this year, down from 113,515 in the same period last year. Similarly, around 129,410 Nepalis joined overseas jobs in the corresponding period in 2014.
Raut said that some of the fellow recruiting agents have themselves left home for overseas jobs, while many others are in the process of leaving the country. Around 200 recruiting agencies are believed to have either completely shut down their operations or rented them out to others.
Amid the sluggish migration trend, even some of the big recruiting agencies are gradually diversifying their investment.
“Those who were just confined to foreign employment business are feeling the heat. They are exploring new avenues to make investment in other sectors like hydropower, tourism and service industries,” said ex-Nafea chairman Bal Bahadur Tamang, who runs Sky Overseas. Tamang and some of his colleagues in the industry, have recently built a hydropower plant in the eastern region.
Arguing that the government is not paying enough attention towards the problem, they warn that the ongoing trend may have serious negative impact on the country’s economy.
The remittance that Nepalis working abroad sent home has literally become the lifeline of the country’s economy. In 2015, the amount remitted by Nepalis from various countries across the globe amounted to around 30 percent of GDP, according to Nepal Rastra Bank.
There has not been significant decline in the remittance, though. Experts say there will not be an immediate repercussion because more than a million Nepalis had gone abroad two years before the number started to tumble.
Some in the recruitment business still believe the impending disaster can be averted if the government fixes a few things. Scrapping the free-visa-free-ticket is one of them that could mitigate the impact. “The free-visa-free-ticket took heavy toll on job demands from Malaysia. Many companies in Malaysia and the Gulf are reaching out to other labour-sending countries for cheaper labour with a minimum hiring cost,” said Kumud Khanal, proprietor of Fusion International, a recruiting agency that sends workers to Malaysia.
Some experts, however, attribute the dip in outmigration to a growth in job opportunities at home, especially unskilled labourers that constitute over 70 percent of Nepal’s migrant workforce.
There is a huge demand for workers in the construction sector due to the rebuilding works of infrastructure damaged by last year’s devastating earthquake.
Nepal will need an estimated 700,000 skilled and unskilled workers for rebuilding projects, according to the Post Disaster Needs Assessment report. More than 500,000 houses were destroyed and over 250,000 more were damaged in the disaster, according to preliminary surveys. Out of them, 31,000 quake survivors have rebuilt their homes so far, according to the Central Bureau of Statistics.
There has been mixed reactions from government officials. The Minister for Labour and Employment shares recruiting agencies’ views on the need to roll back the free-visa-free-ticket provision. An official told the Post that the government “should take necessary steps to change the low cost recruitment policy after studying its effects”.
DoFE Director General Bishwo Raj Pandey last week told the Nafea representatives that the foreign employment would remain intact for another decade although the things look bleaker now.