Why is Nepal the right destination for outsourcers?

This article is a submission by Kantipur Management. Kantipur Management is a certified ISO 9001:2015 company specializing in Contact Center and Business Process Outsourcing.

In the past few years, Nepal has emerged as an ideal destination for offshore outsourcers. The country offers a skilled workforce in science and technology, finance and accounting, human resource, and other sectors.

Its labor cost is relatively low, allowing firms to offer services at a lower cost, due to which there has been an increase in the number of outsourcing businesses in Nepal. USA, Canada, Australia, and other European countries are the major destinations where Nepal has been providing outsourcing services.

Nepalese firms have been providing outsourcing services in various industries like banking, finance, and healthcare, as well as research and development.

Over time, Nepal has developed as a highly competitive outsourcing destination that is expanding.

10 reasons why Nepal is a smart choice for outsourcers

Here are ten reasons why Nepal can be an ideal destination for outsourcers:

1. Cost-effectiveness

The salary of graduates in Science and Technology and management fields in Nepal is substantially lower than their Western counterparts.

The minimum wage of an employee in Nepal is NRs. 15,000 (USD 114$) per month, which is significantly lower than in other South Asian Countries. However, minimum wages do vary with the specific skills and talent required by the job to be done.

This makes the country an attractive option for outsourcers that are looking for quality services. Nepal is growing into a major outsourcing hub alongside other South Asian countries like India.

2. Skilled workforce

Nepal has a pool of skilled workforce in various domains, including:

• Information technology
• Software development
• Content writing
• Customer support
• Graphics design
• Finance and accounting
• Human resource
• Administrative tasks
• Sales and marketing

The abundance of a skilled workforce ensures that outsourcers can have access to specialized expertise at competitive costs.

Similarly, the government of Nepal has made the university-level educational curriculum more enhanced and IT-focused to create a skilled and trained workforce ready for BPO and the IT industry.

3. English proficiency

The English language is used in formal education from schools to universities in Nepal. Furthermore, it is commonly spoken and understood in Nepal, more so among the younger population.

The corporate communication language at all the private companies and institutions in Nepal is English. The growth in English as the language of school, official communication accounts for 35.8% of the population speaking English.

Programs around English for specific purposes make it easier for companies working in outsourcing to attract a larger talent pool.

4. Government support

The Nepalese government has taken steps to promote the outsourcing industries by implementing rules and regulations aimed at attracting foreign investment and supporting the development of outsourced firms.

In the Nepal Trade Integration Strategy (NTIS) 2016, the government of Nepal has selected IT and business process outsourcing (BPO) as one of the priority potential export service industries.

Similarly, according to NTIS, exports of IT and BPO increased to at least US$100 million in the year 2018 to 2020.

5. Cultural affinity

Nepal shares cultural similarities with various South Asian countries and neighboring regions.

With tourism being one of the country’s key attractions, the Nepalese people place a high priority on hospitality. This helps to create a collaborative and harmonious work environment along with establishing shared vision and productivity.

Known to the world as the place of famous Sherpas and fearless Gurkhas, the people hold integrity and rigor in the work they do. This makes Nepalese outsourcing companies refrain from any scamming and instead behold a truthful approach to serving the client.

6. Flexible time zone

Outsourcing companies in Nepal offer 24/7 services to address the outsourcers’ requirements.

Similarly, to improve the labor market for IT and BPO, the Government of Nepal has also been planning to introduce provisions to allow night shifts. These sectors will be classified as ‘public utility’ or ‘essential service’ ensuring the safety of women in this industry.

This opens the opportunity for outsourcers to worry less about the time zones, irrespective of whether the client’s customer is based in the United States, Australia, and other parts of the world. This facilitates real-time communication and reduces delays in project coordination and delivery.

The firms that are looking for outsourcing services in Nepal can save valuable time and get things in the desired time frame efficiently.

7. Flexible workforce

Another reason to outsource in Nepal is the flexible workforce. The offshore team can be established in Nepal with limited capital investment and infrastructure. It can be expanded and reduced based on company needs.

Outsourcing firms can set up their business in a one-time agreement without additional liabilities. Specialized organizations in outsourcing services in Nepal have streamlined work processes and deliver quality services with flexible teams.

8. Scalability and flexibility

Nepal’s outsourcing industry is in a growing period and still developing, which means there is room for scalability and customization.

Outsourcers acquiring services in Nepal can establish a long-term collaboration with service providers and tailor their services to their specific requirements ensuring a seamless and sustainable outsourcing experience.

9. Improved connectivity

The internet penetration rate of Nepal stood at 51.6% of the total population at the start of 2023.

According to Nepal Telecommunication Authority, fixed broadband is accessed by 33% of individuals at their own residences, and mobile broadband is accessed by 98.46%.

With the fast-developing telecommunications sector, including competitive broadband development, the opportunities for offshoring business in Nepal have significantly increased, making the skilled workforce available from anywhere in the country.

The internet connection is now not only limited to the capital city but to other urban cities as well.

10. Growing ICT sector

The ICT sector in Nepal is expanding, and political and economic reforms are being implemented to guarantee that Nepal has access to the internet and technology.

Likewise, the Government of Nepal has been taking initiatives to improve the ICT sector in Nepal by enhancing the educational curriculum, developing infrastructure like IT Park, and providing skills and training programs to create skilled and trained personnel to foster the BPO and IT industry.

Also, to strengthen the legal framework for privacy protection and the needs of IT and BPO overseas clients, the comprehensive legal framework of data and privacy protection has been adopted and implemented.

Nepal’s outsourcing sector moving forward

Nepal has emerged as a desirable destination for offshore business due to cost-effectiveness, skilled workforce, English proficiency, flexible time zone, and many more reasons.

Challenges around political instability prevail, and it is indifferent to other counterparts. The growth in the outsourcing and IT space has showcased a larger opportunity to grow further and tap into the potential the market possesses.

As outsourcers look for ways to improve their operations, Nepal’s outsourcing industry is set to play an increasingly important role in the global market.

Pareshor Kharel is a customer service enthusiast and the managing director at Kantipur Management Private Limited. He can be reached at [email protected]