Kathmandu: A new assessment by the International Labour Organization (ILO) has urged Nepal to shift its Employment Service Centres (ESCs) from a primary focus on “cash-for-work” delivery to modern public employment services centered on job matching, employer engagement, career guidance and digital systems.
The assessment, made public on January 16 and conducted at the request of and in close collaboration with the Ministry of Labour, Employment and Social Security (MoLESS), notes that while Nepal has achieved nationwide coverage of ESCs, the system has yet to deliver the full promise of modern Public Employment Services (PES).
According to the report, Assessment of Public Employment Services and Labour Market Policies in Nepal, there is a significant gap between policy intent and implementation at the local level. In most municipalities, ESC activities remain largely confined to supporting the “Cash for Work” component of the Prime Minister Employment Programme (PMEP), with limited and uneven provision of job matching, employer services, labour market information and career guidance.
The assessment identifies weak employer engagement as a major bottleneck. Survey findings show that 63 percent of ESCs do not register job vacancies, and where vacancies are registered, they are predominantly from the public sector, underscoring the need to build private-sector trust and services at scale.
Digital readiness was also found to be a key constraint. Around 51 percent of ESCs reported having no IT-based registration system, while many of those with digital systems described them as only partially operational. The report further highlights challenges such as vacant staff positions, limited training, poor infrastructure, weak outreach, bureaucratic inefficiencies and inadequate data management, all of which discourage both jobseekers and employers from using ESC services.
While noting that Nepal’s legal framework for employment services is strong, the ILO assessment concludes that performance is constrained by gaps in coordination, management, financing, capacity and digital infrastructure. It recommends a modernization pathway focused on adopting a unified national PES policy framework across federal, provincial and local levels; strengthening governance and social dialogue in line with ILO Convention No. 88; building employer-facing services to improve vacancy transparency and align skills with labour demand; and establishing a national Labour Market Information System and centralized job portal.
The report also calls for a phased approach to reform, encouraging pilot initiatives to test new service delivery models before scaling them nationally.
Speaking at the dissemination event, ILO Country Director for Nepal Numan Özcan said the ESC network has strong potential but must transition from short-term measures to modern job-matching and employer services supported by robust governance and digital systems. He added that the recommended reforms could help make ESCs reliable one-stop services for both citizens and employers.
The findings were presented and discussed at a national event jointly hosted by MoLESS and the ILO, with participation from government officials, social partners and development partners. The ILO said it will continue supporting MoLESS and tripartite constituents to translate the recommendations into a practical reform roadmap aimed at strengthening governance, capacity, employer partnerships and digital delivery to better connect Nepalis with decent work opportunities.
The assessment was carried out under the ILO’s Strengthening of Employment Service Centres in Nepal (SESC) project, implemented in collaboration with MoLESS and supported by the Swiss Agency for Development and Cooperation (SDC), with cooperation from other development partners.
