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The glass ceiling of Israeli high-tech

The field is sparkling and proud, the title "Startup Nation" continues to rise proudly, but when it comes to manpower, Israel is bleeding occupationally and billions of dollars are flowing into accounts from abroad. Where is the money going and is there a chance that this situation will change?

Tags

• Hi-Tech

• Software

• Israel

• Working

• Foreign workers

• Outsourcing

David Rosenthal

Sunday, 15 August 2021, 14:44 Updated: 15:17

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The chronic shortage of manpower in the high-tech industry in Israel is not a new matter. For years, research bodies and industry insiders have warned that there is a gap of about 10,000 workers between the number of graduates of various faculties and educational institutions and the volume of demand for engineering and mathematical minds, but the explosion in recruitment over the past year has forced the industry Their person abroad.

If in the past the main motivation of companies for employment abroad revolved around the issue of savings and wage disparities, then today the reason is that we have reached the threshold of the Israeli economy to meet the demand for talented talents and professionals. The R&D of multinational companies that have opened in the country but at the same time, when it comes to manpower - Israel is bleeding occupationally and billions of dollars that could flow into the bank accounts of Israeli workers, find themselves paid to tens of thousands of workers in foreign countries.

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These buildings are supposed to be staffed by Israelis, but many of the companies pay for outsourcing.

The industrial area in Ramat Hachayal (Photo: screenshot, Google Street View)

"We are talking about an increase of tens of percent in the volume of talent recruitment abroad through us for technological positions, and in light of the high demand, recruitment is also done in new countries such as Argentina, Brazil and Mexico. We have never experienced such a dramatic jump in the volume of demand, and the explanation for this lies, of course, in the digitization that the world is undergoing due to the corona, "notes

Miri Gal Bort, CEO and co-owner of EER GLOBAL

- a global search for employees and considered the dominant company in Israel.

According to her, if until a few years ago, the most significant obstacle to the growth of companies was the difficulty of raising capital, then today, the problem is undoubtedly the delta in Israel 'between the demand and supply of manpower.

How 'serious' is the situation? What is the number of jobs taken out by Israeli companies abroad? In a study conducted by Ethosia about two years ago, it was estimated that there were no less than 20,000 jobs. , And only in the EU and the UK.

The delta that Burt is talking about is well anchored in the data: the number of jobs open today in technology companies is 50% larger than in the first quarter of 2020. The number of jobs offered by high-tech companies grew by 7% each quarter, with the largest demand focusing on software engineers (18% of jobs) as well as business development jobs (17%).

And what fuels that demand?

Among other things, the fact that there are more than 350 international companies operating in Israel that have opened research and development centers here.

And we are not just talking about classic high-tech companies, but also corporations such as Porsche and Volkswagen that have established innovation centers in Israel.

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The world is being digitized and the volume of demand is growing.

Miri Gal Burt (Photo: Yachz)

What is troubling about the whole story is not only the leakage of jobs for staff abroad, but also a trend of an increase in the number of foreign experts coming to the State of Israel for long-term work. A significant number of them are employed in the high-tech industry.

According to

Adv. Yiftach Hanan

, one of Israel's top experts in foreign expert law - the State of Israel does not prioritize foreign experts over the employment of local manpower, but provides an urgent need for companies in Israel to provide immediate employment solutions , Who do not receive a local response.

We are talking about a significant number of development managers and functions in the field of programming for whom we have arranged the process of obtaining a work visa in recent years, "says Adv. Hanan." In order to regulate, coordinate and transfer information between the companies as part of the transition. "

Adv. Hanan also notes," It should be taken into account that every expert who comes to Israel brings knowledge and practice that does not exist here or exists to a small extent and leaves it after leaving, which definitely contributes to the development of The entry of foreign experts into Israel is a blessing for the economy and the State of Israel is doing well, promoting and implementing policies that facilitate the issuance of work visas for them. It examines the request and the period of time required for it. "

The Great Failure: The Periphery

The volume of recruitment abroad by Israeli companies is perceived by some in the industry in Israel as a certificate of poverty for government policy, which does not act with the vigor required to integrate high-tech workers from the periphery of industry. Tel Aviv. 78% of the employee employees start-up companies are concentrated in these districts.

at the same time, even senior officials who deal in reducing disparities in the face of the periphery, admit that this is a long term process and companies squinting abroad pinch: "I think companies are doing what "They do according to their data, you can't blame them," says L'Walla!

Silver Aharon Aharon, one of the top executives in the high-tech industry in Israel, who until recently served as CEO of the Innovation Authority and was Apple's first CEO in Israel.

According to him, one of his failures was the treatment of the periphery.

Despite all the efforts invested and the big money spilled, in the test of the result, the periphery is still faltering.

"To build an ecosystem, there needs to be a big change, and unfortunately it has not yet happened. Nor can the universities in the country be blamed for a policy of limiting the number of graduates and creating a chronic shortage. They have increased the number of graduates by 40%, but that is simply not enough. crazy".

Visas for hitchhikers?

of course.

Adv. Yiftach Hanan (Photo: Yachz)

Where does Israeli money flow to? In which countries do Israeli companies tend to employ workers? An analysis conducted by EER GLOBAL shows that these are mainly Ukraine, Poland, Bulgaria and Belarus. "India, of course, is also a major outsourcing destination, as are Romania and countries such as Slovakia," notes Gal Burt.

One of the first companies to recruit developers in Eastern Europe is WIX, which is currently traded at a market value of about $ 15 billion. She established a development center in Ukraine about nine years ago. The company has become a well-known brand and employer in the country.

And what does the near future hold? Will we continue to see an upward trend in the number of Israeli companies recruiting workers abroad? Extensive recruitment in the field of development.

Assaf Rapaport, one of the most prominent entrepreneurs in the industry, said in a recent interview with Calcalist that he is ready to recruit five times as many employees out of the dozens of employees he employs at any given time, and he does not know a growing startup that is not looking for a similar number.

In addition, Rapaport said that there is no problem in raising money today, but there is a huge difficulty in recruiting workers: "This is the glass ceiling of Israeli high-tech."

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