“Some policy flexibility from the government side like contribution for a certain period of time especially on SSF” says Rajiv Sharma, Managing director of Job Dynamics

Rajiv Sharma, the managing director of Job Dynamics Private Limited is a person who is devoted to the area of organizational development, strategy formulation, monitoring and evaluation, organization strengthening, HR audit, recruitment, procedure mapping and implementation, management consulting, coaching, and training. Graduating from Ace Institute of Management with a degree in Master of Business Administration and an undergraduate degree in International Business and Finance from Wartburg College Mr. Sharma is currently an adjunct faculty at King’s College. Before joining Job Dynamics he was involved in organizations like Chaudhary group and Real Estate Research Cooperation. 

About Job Dynamics

In a world where workforce competition is fierce and the needs of organizations are ever-changing, Job Dynamics (JD) is an HR consulting firm that is dedicated to facilitating job recruitments and providing HR and management consultation services to businesses. With a firm belief that people are the only long-term sustainable competitive advantage of the company and that companies prosper when value-aligned people working for them, JD tries to develop long-term relationships with organizations that they serve while trying to deliver high-quality candidates across all fields of expertise.  

JD describes itself as a human company that focuses on solving human problems in the most humane way possible. The company acts as a platform for job seekers and employers by providing a platform where both sides can present their opportunities and skills. The firm makes it easier for job seekers to know where their skills are required. Moreover, JD is dedicated to making a systemic human resource system by dealing with evolving challenges of workforce flexibility, it creates solutions based on the needs of the organizations that they are working with. It provides consultation, training, and other value-based services and strives to become a strategic partner to help create the best HR system.

Here’s what Rajiv Sharma  says about promoting the entrepreneurial ecosystem in Nepal:

1.   What do you think is one of the most required policy changes in Nepal from the perspective of promoting entrepreneurial ecosystem in Nepal?

The government has recently revised the minimum wage and has increased from Nrs. 13,450.00  to Nrs. 15,000.00. Despite the good intention behind such a policy, it has created a ripple effect on the entrepreneurial ecosystem. Most of the companies especially start-ups are not able to attract people which is quite crucial in initial days when they are financially constrained. Similarly, those who have been able to employ people are not able to comply with all the provisions of minimum wages such as annual leave, sick leave, contribution to social security fund (SSF) and festive bonus which accounts to a total of Nrs. 18,441.08 as cost to the company. This has created unfairness in the entrepreneurial ecosystem as there are companies complying and others not being able to with the minimum wage as stated by Labor Law and Labor Rules.

Thus, some policy flexibility from the government side such as a contribution of 50% for a certain period of time especially on SSF would have a positive impact on promoting the ecosystem. For example, currently gross Nrs. 15,000/- where Nrs. 1,877.00 is contributed by employers and 1,271.00 is contributed by employee. The total figure adds up to Nrs. 3,148.00 which is a huge contribution from both employer and employee. There are numerous long-term benefits of SSF such as insurance, loan facility, maternity benefit, life time pension scheme for physical disability resulting from accidents. However, these benefits can only be reaped if companies can survive in their initial days.

Please refer to the following table for a detailed breakdown of the salary.

S.NParticulars Remarks
1Basic Salary9,385.0060% of gross salary
2Dearness Allowance5,615.0040% of gross salary
 Minimum Wage as per Nepal Government15,000.00 
    
3Annual Leave per month (18 days paid leave) to be adjusted annually469.25Annual as per labor act of Nepal
4Sick Leave per month (12 days paid leave) to be adjusted annually312.83Annual as per labor act of Nepal
5Social Security Fund (20% of basic salary from employer)1,877.00Annual as per labor act of Nepal
6Social Security Fund (11% of basic salary from employee)1,271.93Will be deducted from employee and contributed to SSF
8Festival Bonus per month (equivalent to 1 month’s basic salary)782.08This is monthly figure
    
 CTC18,441.16 
 Salary in Hand to staffs13,728.07 

2.    What impact will such policy change yield for the entrepreneurial ecosystem in Nepal?

The impact of such policy change will encourage organizations to comply with the labor law and rules, which all companies should a responsible entity of the country. Likewise, organizations are able to attract talent in their companies to create competitive advantage in the marketplace. It will send an overall positive message and encourage more people to start and open their business in Nepal. Furthermore, it will encourage multinational companies, IT outsourcing companies to outsource jobs creating more jobs and upgrade the talent pool of the country that will further enhances the overall entrepreneurial ecosystem due to availability of skilled people in the market.

As a part of Global Entrepreneurship Week 2021, Samriddhi Foundation asked Nepali entrepreneurs what they think is the most pressing policy change to promote the entrepreneurial ecosystem in Nepal. In this series, Samriddhi Foundation will feature two entrepreneurs a day through the #GEW2021 week, starting from November 8 to November 14, 2021.