A new assessment by the International Labour Organization, carried out in close collaboration with Nepal’s Ministry of Labour, Employment and Social Security, finds that while Employment Service Centres now have nationwide coverage, they are not yet functioning as modern Public Employment Services. The report notes that there is a significant gap between policy ambitions and actual service delivery at the local level.
In most municipalities, the work of Employment Service Centres remains largely focused on administering the “Cash for Work” component of the Prime Minister Employment Programme. Core functions expected of modern employment services—such as job matching, employer engagement, career guidance and the provision of labour market information—are still limited, inconsistent, or underdeveloped across the country.
The assessment identifies weak links with employers as one of the most critical challenges. Survey data show that nearly two-thirds of Employment Service Centres do not register job vacancies at all, and where vacancies are recorded, they are predominantly from the public sector. This highlights the need to build trust with private employers and expand services that respond to real labour market demand.
Digital capacity is another major constraint. Around half of the Employment Service Centres reported having no IT-based registration system, while many of those with digital systems said they were only partially functional. These limitations reduce the efficiency, reach and credibility of services for both jobseekers and employers.
Beyond these structural gaps, the report documents a range of practical barriers affecting service quality. These include vacant staff positions, limited training opportunities, inadequate infrastructure, weak outreach and awareness, bureaucratic inefficiencies, and poor data management. Together, these issues discourage active use of Employment Service Centres and limit their impact on employment outcomes.
The assessment concludes that Nepal has strong legal and policy foundations for public employment services, but progress is being held back by weaknesses in coordination, management, financing, institutional capacity and digital infrastructure. Addressing these constraints is essential for transforming Employment Service Centres into effective, citizen-focused institutions.
The ILO recommends a gradual but decisive modernization process, centred on strengthening governance, improving social dialogue, expanding employer-facing services, and developing integrated labour market information systems and digital job portals that link federal, provincial and local levels. A phased approach is advised, allowing new service models to be tested, refined and scaled up based on evidence.
Speaking at the dissemination event, ILO Country Director for Nepal Numan Özcan emphasised that the Employment Service Centre network has strong potential but must move beyond short-term employment measures to provide reliable job matching and employer services supported by robust governance and digital systems. He noted that these reforms could turn ESCs into effective one-stop services for both citizens and employers.
The findings were discussed at a national policy dialogue hosted by the Ministry and the ILO, bringing together government officials, social partners and development partners. Senior officials from the Ministry indicated that the assessment will guide the development of a national Public Employment Services policy framework and related reforms.
The ILO will continue working with the Ministry and tripartite partners to translate the assessment’s recommendations into a practical reform roadmap. The goal is to strengthen Employment Service Centres so they can better connect Nepalis to decent work opportunities and contribute to a more inclusive and responsive labour market.
