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COVID-19 May Give Much-Needed Boost to Israel’s High-Tech Workforce

COVID-19 May Give Much-Needed Boost to Israel’s High-Tech Workforce

Dozens of Israelis working abroad are already planning their return, and thousands more may return over the coming summer

Israel’s high-tech industry suffers from a perpetual workforce shortage, and the growth of large global companies locally has only intensified the problem. Now, however, COVID-19 and the uncertainty it created is pushing many Israelis working abroad to return home, and a joint project of a headhunting company and the Israel Innovation Authority is looking to assist returning professionals and facilitate long-term growth in the industry.

Almost 10% of Israeli workers are employed by the local high-tech industry, according to a 2019 report by the Israel Innovation Authority. The industry, world-renowned for its innovation, is central to the small country and its economy. Yet, it suffers from a chronic shortage of skilled workers. The same 2019 report stated that 18,500 technological positions are waiting to be filled.

The Israeli government “has been trying to cope with the challenge of training workers for the Israeli high-tech market for more than 15 years,” Yotam Tzuker, head of business development at CQ Global, an Israeli headhunting firm that works with the local tech industry, told The Media Line.

Danielle Tabin Rotem, who manages the Human Resources department for Redis Labs Israel, a tech company whose R&D center is located in the country, explained that the present situation is even more difficult for companies looking for employees. “In addition to the ever-present shortage, now, during the pandemic, the market has become very challenging,” she told The Media Line. “People are hesitant to leave their positions and look for opportunities in a period of uncertainty.”

Everyone’s looking for stable ground – and that ground is the State of Israel

But now, a partial solution may come from a surprising source. The Israel Innovation Authority, together with CQ Global, has launched Back2Tech, a project intended to help Israelis working in tech abroad to return to Israel.

The Back2Tech project works closely with both the returnees and the companies to tailor-make a fit, encouraging Israelis to return and making the process as seamless as possible. Tzuker says that with the project now in the pilot phase, they are working with just a few dozen people, but they expect it to rise to hundreds of returning citizens further down the line.

Ofir Auslander, CQ Global’s spokesperson, told The Media Line that “an estimated 10,000 Israelis living abroad work in different positions” in the tech industry. And many are interested in returning, following a year of deep uncertainty.

“Hundreds, if not thousands, are going to return in the coming summer because of what happened with COVID-19 this year,” Tzuker said. “Everyone’s looking for stable ground – and that ground is the State of Israel.”

Tzuker also added that stability isn’t the only issue that COVID-19 raised to the surface. “People haven’t seen their families in a year and a half, two years, which isn’t easy,” he said. The forced separation, he explained, is pushing people to reconsider their residence abroad.

The Media Line spoke to an Israeli who specializes in business intelligence (BI) and works in the American high-tech industry. The professional, who plans to return to Israel permanently in August, told The Media Line that the forced separation caused by COVID-19 indeed influenced her family’s decision to return. “We are here visiting Israel after an absence of a year and three months,” she said, “and people couldn’t come and visit us. Our child was born four months ago, and no family member could come and see him.” Additionally, the strain of working from home without any help from their extended family also pushed them to prefer to be closer.

The BI specialist also adds that she has “many friends that have come back” to Israel. Some returned because their work visas weren’t renewed, “something that never happened until COVID.”

The pandemic also opened up the possibility of working from home, making the process easier. Ariel Lev, who works in Germany for a local tech company and plans to return to Israel, told The Media Line that COVID-19 “changed the way people work … many companies realized that it is possible to work from home.” This allows the process of returning to become significantly easier, as one can begin working for an Israeli company while still living elsewhere. However, Lev said that apart from this advantage, the pandemic and its troubles played no part in their family decision to return, which was motivated by their desire to give their children an education that has a more Israeli orientation.

On the one hand, COVID-19 is pushing a lot of people to return home, and on the other, the Israeli market has matured and is in dire need of quality workers that have worked for global companies

Importantly, however, COVID-19 was only a catalyst that worked in tandem with a larger shift in the local tech industry to create this interest in returning to Israel. According to the 2019 Innovation Authority report, over the last decade the tech industry has shifted from growth based on new startups to growth based on “scaleups,” meaning that instead of the industry developing as result of new, small companies launching and selling to outside buyers, the focus of entrepreneurs is on expanding the companies, and growing them locally.

“The average Israeli entrepreneur isn’t looking at an exit, like five years ago, selling the company for a few hundreds of millions of dollars and moving on. Suddenly, there’s a challenge here to grow large companies like Wix, like Checkpoint, and to build global companies here, not small ones – startups – that sell to American or global multinational companies,” Tzuker explained.

Auslander said that, in the past, Israelis that had risen through the ranks of tech companies abroad would have had to “downgrade” in order to return to their homeland. But now, “all of a sudden, there are a lot of options here, the market is different.”

These large companies, whose headquarters are in Israel and who cater to the global market, have not only created opportunities, they have highlighted the need for skilled workers. “To grow large companies, global ones like Wix, we need potential workers that we don’t necessarily have in the Israeli market right now,” Tzuker said.

“There’s a very interesting opportunity at this point in time,” he said. “On the one hand, COVID-19 is pushing a lot of people to return home, and on the other, the Israeli market has matured and is in dire need of quality workers that have worked for global companies.”

The growth of these large companies is crucial for the country, as they widen the circle of those enjoying the fruits of Israel’s prospering tech industry. Many companies that have been sold as startups leave their R&D center in Israel, but these employ little other than programmers. The 2019 report says that such enterprises employ two programmers for every non-programmer. However, companies that have their headquarters in the country, Tzuker says, “need a finance department, need a marketing departing, need an administration.” All this means that more people get a piece of the high-tech pie.

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