Vocational training makes sense only when it leads to gainful employment. Over 90% of the young graduates trained by the Employment Fund in Nepal found a job. Read how this worked in practice and the impacts it has on disadvantaged groups.
How skills training changed the lives of disadvantaged young people in Nepal
Additionally, Helvetas conducts regular internal or external evaluations and reviews the sustainability of the outcomes and systemic changes. Tracer studies – a survey method that gives information about the employment, contract and income situation of graduates after training – are applied in many Helvetas Vocational Skills Development projects.
Helvetas regularly commissions specialist research institutions to assess the impacts of its signature projects. In the case of the Employment Fund, Helvetas contracted the Nepalese research firm RIDA (Research Inputs and Development Action) and the Department of Geography of the University of Zurich (UNIZH). They jointly studied the overall impact of the Employment Fund as well as its specific impact on the lives of marginalized people.
The Employment Fund in Nepal
The Employment Fund was financed by the Swiss Agency for Development and Cooperation, UK Aid and the World Bank, with an overall budget of about 35 million Swiss francs. Helvetas operated the secretariat of the fund, which covered 87% of all districts in Nepal and approximately 80 occupations in different sectors (e.g. construction, hospitality, garments and textile, agriculture, electronics, etc.), and collaborated with 57 training providers. The training courses usually lasted three to four months. 80 % of the content was practical; theory lessons made up the remaining 20%.
The Employment Fund applied a results-based financing approach, paying training providers based on their success in training and then connecting young people with the labor market. Moreover, the Employment Fund placed special emphasis on the inclusion of women and other disadvantaged groups in the courses, doing this, for instance, through targeted incentives, communication campaigns and counseling.
Employment for the masses
All the graduates had attended courses two to three years earlier. Personal interviews were conducted with the graduates using the questionnaire from the Helvetas Tracer Study Tool Kit. Employers, training providers and representatives of support institutions were also interviewed or participated in focus group discussions.
Training and employment results
By the end of 2015, the Employment Fund had financed skills training for about 100,000 Nepalese young women and men, of whom over 90% were employed and 75% gainfully employed. More than 50% of the trainees were women. The results-based financing model had brought about a paradigm shift in the implementation of skills development projects in Nepal: training and employment services focused on the employer’s needs, and these services could only be considered successful if the trained person was in gainful employment.
The transition period between the completion of training and employment lasted on average less than two months. It did, however, vary greatly from one profession
to the next. In some trades, there were significant differences between men and women, but overall these differences were insignificant (women: 1.8 months; men:
The analysis of the transition period from training to employment was important for the future selection of trades and training providers and for decisions about gender-specific measures and job placement, as well as for tracing and ensuring that graduates find employment within a reasonable period of time.
Employment status over time
80% of graduates became self-employed or found wage employment within the first three months, although not all of them were in gainful employment. 92% were employed six to nine months after their training course. There was a trend towards self-employment over time. Immediately after graduation, 56% of those employed were in wage employment, while 44% were self-employed. The opposite was the case two years later when 44% were wage employed and 56% self-employed.
About half of the entrepreneurs were successful, while the other half were struggling with their businesses, mainly due to a lack of relevant additional skills and unfavorable markets. Self-employment was challenging because it requires not just technical but other skills such as financial literacy, risk-taking and, above all, an “entrepreneurial mindset”. The tracer study results showed that 91% of the students preferred self-employment if they had access to funds for initial investment. That may explain why graduates often started out in wage-employment and then changed to self-employment after a few months of contracted work.
Many graduates hoped for a more secure working environment, a higher income and more autonomy when self-employed. In the informal economy, which is dominant in Nepal, employees often lack formal work contracts with clear details of their salary, working hours, duties and rights. They therefore also lack any social security or pensions, which constitute important employment benefits in developed economies.
Overall, the tracer studies showed that 93% of the self or wage-employed graduates were satisfied with their current job. Nonetheless, the main challenges identified were low salaries, no scope for further training and discrimination. Two years after graduation, 70% of graduates were still working in the same profession they had been trained for.
After the training course, the average monthly income rose from NPR 2,471 to 8,933. Before the training, the graduates contributed 48% to their household income, whereas after training this rose to 67%.
Helvetas develops and guides projects. To be sustainable, they must be locally embedded. We support our partners in effectively organizing projects and processes and assist local authorities to better assume their responsibilities.