IDF gains small win in battle for brains in face of startup nation’s siren song

The Israel Defense Forces was surely pleased when a 29-year-old captain in a cyber-defense unit recently signed on for two additional years of service after having already served for eight.

“After the two years, we’ll see what will be,” said the officer, who wouldn’t reveal his name for security reasons, in a phone interview. He is constantly getting job offers from civilian companies, he said, but the challenges and the wide variety of projects he deals with in the army keep him hooked. “There are more important things in life than money,” he said. “The work here is so much more meaningful because we are talking about defending the country.”

After decades of witnessing the best and brightest of its officers leave the barracks to join the ranks of the so-called startup nation, where the likes of Google, Apple and Facebook entice soldiers with flashy salaries and benefits, the IDF is fighting back with its own methods of seduction. These include raising salaries and setting out a plan to “lease out” its minds in an effort to stem the flow, even if for just a little while.

“I must keep the best people in the army,” said Maj. Baruch Schterenberg, head of wage and pensions planning in the IDF. The army “has taken steps. We work in a very dynamic world and we are constantly thinking of ways to keep our soldiers,” he said.

And the results are starting to show.

Figures released by the IDF show a partial stemming of the flow: while in 2014 some 25 percent of its elite officers left the service, in 2016 the number dropped to around 23 percent.

“I think we are going in the right direction and I hope to see the same trends in the coming years as well,” said Schterenberg.

The figures have held even in the first half of 2017, with a 2.5 percent drop in the number of soldiers who leave the army voluntarily compared to the first half of 2016, said Lt. Col. Kalanit Malka-Laxman, head of the army’s planning and control branch.

“It seems like the young officers are reacting well” to the new packages offered by the army, she said. “We are constantly taking their pulse to find out what speaks to them, what they find important and what is right for us to do to influence their willingness to stay on as career officers,” said Malka-Laxman.

From the barracks to Startup Nation

With Israel’s startup scene flourishing and multinationals setting up research and development centers, a shortage of engineers is heating up the competition for skilled personnel, with companies offering ever-fatter salaries to recruit talent.

A reliable pool of trained workers — one that has been fueling the “startup nation” — has traditionally come from the army. The IDF recruits most 18-year-old women and men for compulsory two-to-three-year service and allocates them to combat or other units, including intelligence and tech units.

“The IDF is the biggest incubator in Israel of the tech population,” said Schterenberg. The training and knowledge “these children” glean from their army training is “unbeatable” and unrivaled in any other workplace, he said. “This is not university or college — this is the real thing.”

The number of active high-tech companies operating in Israel has jumped from 3,781 in 2006 to 7,681 at the end of September 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 to Bosch have all set up research and development centers in Israel, with 366 R&D centers run by multinational corporations locally, compared with about 250 such centers four years ago, IVC data shows.

Salaries for ex-officers in the private sector range from NIS 30,000 ($8,580) to NIS 40,000 a month, explained Schterenberg, while in the IDF technology career officers earn some NIS 7,000 to NIS 10,000. The average wage in the high-tech industry is about NIS 21,000, according to data released by the Israel Innovation Authority, compared to NIS 9,800 in the economy at large.

In addition, the army is in the midst of moving many of its bases to the south of the country, with tens of thousands of soldiers to be relocated.

The relocation is a “very, very big challenge,” said Schterenberg, as most tech officers currently serve in Tel Aviv and its environs in the center of the country and won’t gladly move to the periphery.

Fighting back

Over the past two years the army has set out a number of initiatives to fight back and stem the flow. It has raised salaries for career officers and created a new grants plan to reward specific, targeted soldiers with annual bonuses in addition to their salaries.

The new plan also allows a greater number of soldiers to get degrees while they are in the army and offers them the possibility of rising up in the ranks faster by lowering the army retirement age from 48 to 42, opening up a greater number of higher-ranked positions.

But perhaps the most revolutionary of plans is yet to come. The IDF is studying the possibility of allowing officers in its elite 8200 high-tech Signal Corps unit to take a timeout and get a taste of working in the startup nation. News of the plan was first published in the Haaretz daily last month.

“This program is revolutionary and I support it,” said Schterenberg, saying the IDF is still studying the idea.

A survey of commanders who chose to remain in the army revealed that they feel they are missing out on the startup scene, he explained.

“When they go home by bus they see all these startup firms” in Herzliya or Tel Aviv “and this does something to them,” said Schterenberg, “So we said, let’s lend them out for a few years to the high-tech world — and then we’ll get them back.”

“We will let them ‘breathe’ the sector and they will learn other things and think in different ways, perhaps, and then they will come back to us.”

It is a risky move, Schterenberg agreed. But, he said, “even if not everyone comes back and even if only half come back, or a third, I managed to do what I wanted.”

Members of the 8200 unit have set up some of Israel’s most successful technology firms, including Check Point Software Technologies Ltd, Nice Systems and Verint Systems.

Not all, however, believe the “leasing-of-minds” plan will work.

“I am skeptical,” said Nir Lempert, the chairman of the alumni association of the IDF’s 8200 unit.

If the plan is to allow people to join high-tech corporations and work there for a while and then return to the army, that could work. But if the idea is to lease them out to startups, that is harder to pull off, he explained.

“In startups, you are either all in, or out,” he said. “And if the startup succeeds, it will be difficult to leave.”

Either way, he said, “It is difficult to believe that redemption will come from this program alone. There have been similar efforts in the past which have not worked. But in emergency situations it is important to try, and not preclude any initiative.”

Schterenberg believes the benefits of the “mind-lease” plan will outweigh the risks. “It shows that the army thinks outside the box, sets out groundbreaking models and is not afraid to rub shoulders with the civilian world.”

The whole new package of benefits — the higher salaries, the faster promotions, the grants coupled with the challenges — is a “revolution” that has been put in place over the past two years, said Schterenberg. It will put the army back on track in keeping its soldiers, he added, and also proves the IDF knows how to react swiftly to meet their needs.

“This is not a big ship that is difficult to steer. The army has become sophisticated and knows how to send out turbo ships that can move fast,” he said.