Jerusalem has only 465 high-tech companies compared to Tel Aviv's 2,600, so a plan is on tap to attract the young and the educated
All large Israeli cities seek to develop a high-tech industry and retain the young and well-educated, but with Jerusalem the need is particularly urgent – the capital’s high-tech sector will need 4,300 workers in the next two to five years, the Haifa-based Samuel Neaman Institute says.
The capital is Israel’s largest city at nearly a million people, but its workforce participation rate is low at under 50 percent. Plus Jerusalem is suffering from negative immigration – in 2020, 8,000 more people left than moved in.
The city’s high-tech industry has grown in recent years, not that it can be compared to Tel Aviv. According to the Israel Innovation Authority’s 2022 annual report, the sector in Tel Aviv has climbed to around 2,600 companies, a 32 percent increase from 2015. For Jerusalem, it’s 465 companies, a rise of 19 percent.
According to the Israel Innovation Authority, Jerusalem has a multitude of small startups, compared to, for example, Tel Aviv suburb Ra’anana, where 4.2 percent of Israeli high-tech employees work – mostly at larger companies. But the capital is also home to a few large employers such as Intel with around 1,300 workers and Intel-owned Mobileye with around 1,500.
In a new report, the Samuel Neaman Institute explores trends in the high-tech job market as it helps in efforts to match qualified young people with companies’ needs. The study includes an analysis of help-wanted ads, a poll and interviews with firms.
The researchers polled 100 companies – 60 high-tech firms and 40 biomed outfits – including eight large companies of over 200 employees. The firms were asked if they were having a hard time recruiting employees and whether they were flexible regarding applicants’ qualifications.
According to the poll, recruiting problems stem from factors including a willingness to work in Jerusalem, a shortage of skilled people in Jerusalem, as well as high competition with other jobs and high wages in the center of the country. The difficulty in recruiting employees is felt keenly in software development and biological R&D.
“The world is heading toward ‘systems of systems’ – large autonomous systems with massive computing power, miniaturization and so on,” one person said in the report. “These are trends in all industries, so everybody is looking for the same pool of workers.”
Inexperienced graduates
Most companies expressed a willingness to take on young people after training and find them jobs even if they don’t meet all the requirements. And these firms are willing to employ degree holders with no job experience in high-tech or biomed.
According to the survey, there’s also a willingness to employ discharged soldiers and young people with military experience or professional training in segments like software in high-tech or production and lab work in biomed. About half the companies said they’d be willing to recruit workers without degrees.
Majors that high-tech covets include computer science and electrical engineering, while biomed is keen on biology, biotechnology and chemistry – usually advanced degrees.
In addition, there are high-tech and even biomed jobs that don’t necessarily require an academic degree such as software testing and programming. Another common requirement is high proficiency in English on top of good reading, writing and presentation skills.
According to the poll, fewer than half the respondents were aware that government grants are available to help with recruiting. Only around a quarter of companies applied to receive such grants.
Of these, around half reported that the grants didn’t help because applicants couldn’t be found to fit the grant criteria, or because the grants couldn’t make up for applicants’ shortfalls in knowledge and experience.
The study was carried out by the Samuel Neaman Institute along with the Social-Economic Forum and the Israeli Business Roundtable.
Nearly half the respondents reported difficulties in recruiting software developers (such as Python programmers and DevOps experts), and nearly half reported difficulties in recruiting for biological R&D (such as analytical and bioanalytical chemists, as well as people with a Ph.D. in biology or chemistry).
A plan to kick-start careers
The coming years are expected to see a shortage as well; one suggestion by the report is academic or professional training in cooperation with industry to overcome the problem of employees with no experience. Their integration requires a great outlay of resources.
According to the survey, the companies’ preferred model of recruiting is the subsidization of training and mentoring activities.
Therefore, the report recommends three models being used around the world: the integration of students into companies relevant to their majors, paid internships for graduates, and mentoring for candidates who plan to devote most of their time to their work. Such a plan would allow discharged soldiers to both work and slowly complete their studies.
Based on the interviews with companies, the researchers recommend a “career kick-starting” plan. An employee taking part would be paid up to 20,000 shekels ($6,170) a month for three to nine months. The employer would contribute half and employ the worker at no less than 80 percent of a full-time position.
Actually, the problem of applicants with no experience plagues the entire industry, not just high-tech in Jerusalem. After all, training employees in-house requires great resources, and the employee might leave at the end of training.
Therefore, government participation in paying wages during the training might reduce the companies’ risk and encourage them to employ workers with no experience, the report says.