The employment fair held at the private university IDC Herzliya at the end of last month was a microcosm of the Israeli job market. Among the throngs of students who mingled with employers amid balloons and multicolored gummy candies, the software engineers and those with a technology background were noticeably discriminating and in no rush to commit. That’s because in the tech market, workers are in greater demand than supply.
“In the past four years, since Microsoft and Google set up their R&D centers in Israel, the competition for hiring students has become much stiffer,” said Yuval Beres, software development manager at Bloomberg LP in Israel, who was at Bloomberg’s stand with posters and handouts of how new employees can “Make Your Mark” at Bloomberg, a financial services company that uses software engineers in its R&D teams to help the company provide data for financial professionals globally.
It has become “very hard” to get the best students, he said. “We have to really fight over them and the students are starting to be recruited much earlier than before,” Beres said. Many of the top picks either already have jobs or have received job offers.
“We give them the best terms, but today we have to pay 70 percent more than we were offering in 2007,” he said.
Students today are also much more discerning, Beres said. They don’t only want only to know about salaries, but also about potential progress in the job, possible career track, mentoring, and more, he said.
Multinationals like Google and Microsoft are competing with Israeli tech companies and startups for the best of talent as a shortage of workers has become a major threat to Israel’s high-tech industry, which has been a key engine fueling its economy.
The Finance Ministry warned last year that Israel’s high-tech sector has already ceased to be the nation’s growth engine as fewer students graduate with science degrees. The industry will lack more than 10,000 engineers and programmers in the coming decade if the government doesn’t take immediate action to prepare students to meet the shortfall, the Ministry of Economy and Industry’s former chief scientist Avi Hasson warned in a report last June.
This lack of a pool of skilled workers has been highlighted even more by the burst of activity in Israel’s high-tech sector, which has almost doubled the number of companies operating locally in the past decade. Many in the field want the challenge of starting their own company rather than joining an existing one, and successful entrepreneurs tend to return to the market with new ventures.
The number of active high-tech companies operating in Israel has jumped from 3,781 in 2006 to 7,860 at the end for the first quarter of 2017, according to figures compiled by Tel Aviv based IVC Research Center, which tracks the industry.
In addition, companies from Google to Apple, Deutsche Telecom and Bosch have all set up research and development centers in Israel, with 278 multinational companies operating a total of 357 R&D centers around the country today, compared with about 250 such centers in 2013, IVC data shows.
“Competition is high,” confirmed Tali Peled, a business operations manager at Argus Cyber Security, which aims to provide cybersecurity solutions for connected vehicles. Peled was scouting for graduates in the fields of software development and cybersecurity, cloud engineers and big data.
Argus attends many of the employment fairs across the country to identify students “we feel are relevant to us,” she said, including graduates of the army’s elite 8200 technology unit. “We hope this will help us build an effective and good database of CVs” for when the company is in need, she said.
Some 112 companies attended the IDC fair, which was built around spheres: high-tech and internet; the financial sector, including banks and institutional investors; government offices, including the Mossad and the Shin Bet security services; consulting services; and miscellaneous industries, including consumer goods companies like Coca-Cola, Strauss and Fox, said Karin Kaufman, director of the career center at the IDC.
Students and graduates of IDC and other universities walked around, some with CVs in hand, others sending theirs directly to potential employers via an app set up by IDC.
Twenty-one-year-old Viola Hasbani from Italy, who is completing her third year of business studies at the IDC, was looking for a part-time job in marketing or business development. “Meeting people face-to-face is much more effective than just sending over your CV,” she said.
LivePerson, a US tech firm that has an R&D center in Israel, develops products for online messaging, marketing and analytics. Yael On, its recruiting director, was scouting for data scientists, software developers, mobile developers and Java developers. “Attending the fair builds up our brand and exposes us as an employer to potential candidates while they are still students. The aim is to build a relationship with them. It increases the chances that when they look for work they will turn to us. It is a win-win for us and for the students,” she said.
“The market is flooded. There is a huge demand for workers but a very small supply of software developers. The salaries rise on a quarterly basis and the number of startups out there is affecting competition all the time. The salary benchmark data becomes irrelevant very quickly,” she said.
On average, according to data compiled by Workey, which has developed a search job search engine for Israeli startups, in the five years to mid-2016 salaries for these skilled workers rose around 10 percent, and workers tended to change jobs on average every 20 months. The salary for an engineer in Israel is about $63,000, compared with a global average of $49,000, but still well below the $112,000 an engineer gets in Silicon Valley, according to the Global Startup Ecosystem Report 2017.
Twenty-four-year-old Amir, who preferred not to disclose his last name, is in his second year of computer science studies at IDC, and is looking for part-time work in his field so he can “grow at the job,” he said. He feels he can be picky because he knows he is in a high-demand field. “I have good marks and I have some experience and I am confident,” he said, handing out his CV to a number of the firms present.
Given the realities of the current high-tech job market, the odds are in his favor.
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