Filling the Israeli tech talent pool

Recruitment challenges, human capital shortage, the need for new talent. These are all terms used to describe the very well-known issue that troubles many within the Israeli high-tech ecosystem.

While Naftali Bennett’s government, the first to be led by a Prime Minister with high-tech experience, set a goal of growing the local tech workforce from 10% to 15% of the general workforce, a change cannot materialize overnight. So, as the country, as well as other parts of the world, are recovering from the coronavirus pandemic and are adapting to the new reality it created, tech companies continue to seek top talent and hope to fill their open slots.

To discuss what is perhaps the most urgent need of the local tech sector, CTech gathered leading entrepreneurs and CEOs and asked them how they deal with hiring challenges, and what should be done differently to help remedy the situation.

Nir Zohar, Wix president and COO

Senior engineers according to Wix president and COO Nir Zohar, are the hardest employees to find today. “The entire high-tech ecosystem feels the lack of a workforce, and we are no different,” he explained. “Even before the unprecedented growth of the past 18 months, with nearly $20 billion infused into the tech ecosystem, Israel was lacking in talent to fill roles whether technical, marketing, UX, etc. Now, with the sheer amount of organic growth in the industry, companies are rapidly trying to fill roles and competition is fierce, which we feel across the board.”

“Israeli tech is going through dramatic changes and with an entrepreneur as prime minister, we have a unique opportunity to not only sustain the growth but continue product excellence within Israel. There are key actions that need to be executed by the government to help solve this issue in the short-term and long term.”

Zohar already has an idea of what some of those steps should be. “First, kids must learn to program. It has to be incorporated into the school curriculum at an early age. It is the global language right now, and this will equip people with the necessary education and training for more home-grown opportunities, while organically growing the industry. Secondly, Israel is not currently a destination for global relocation. We need to work to bring in top talent to Israel, and then that talent can help grow the ecosystem even more.”

That last point of making Israel more attractive for relocation touches on the recent debate over outsourcing and importing talent that has divided the ecosystem. “To keep our Israeli presence central, our priority is to hire key functions in Israel and if that is not an option for the role we are hiring, we hire elsewhere. Today, Israel is not the first place that comes to mind for relocation purposes, and that is what we want to change,” Zohar explained. “The goal is to bring talent to Israel, not big numbers of junior employees, rather top talent that the Israeli young ecosystem does not have. Not necessarily engineers but a range of top salespeople, marketing, data, or UX. These foreign experts can be a game-changer for the Israeli economy.”

“We see a plan to put Israel on the global relocation map as a chance to bring talent to Israel and keep its knowledge here. These leaders can then train and build teams of people who can eventually become experts with skill sets that would not have been found in the ecosystem before.”

Was your company impacted by hiring challenges? Has the talent shortage affected your product?

“The hiring challenges that the ecosystem is facing now is not a new phenomenon for us, in fact, it is something we have been aware of and dealing with for the past 3-4 years. Luckily, we know how to recruit global talent. We are a global company with workers employed in 23 locations around the world. However, the challenges are impacting our Israeli presence. This is the first year in our company history that the global employee count exceeded the amount of Israel-based employees. It is important for us to maintain our Israeli presence and continue building the company from our Israeli headquarters. Regardless of where we are hiring and the challenges, the product is never compromised.”

When asked how the web giant is dealing with the competitive job market, Zohar points to his company’s reputation and connection with his staff. “More and more people in the tech sector want to feel that the job they are doing creates value and does good for others. They want to feel proud when they are asked where they work and what they do, and our culture gives employees the ability to directly impact the product and the company strategy.”

“Additionally, we have worked hard to maintain our startup culture, even as we have grown to over 5,000 global employees. With senior management headquartered in Tel Aviv, we encourage an “open door” atmosphere. In essence, employees are encouraged to interact with people across the company including and especially senior management to brainstorm, ask questions, raise concerns and generally converse,” Zohar stated.

Micha Kaufman, Fiverr CEO and founder

When presenting the Fiverr CEO with a question about outsourcing, the answer is pretty direct. After all, the marketplace for freelancers Micha Kaufman founded with Shai Wininger helps millions around the world to find the right person for whatever professional need they might have.

“Across the entire labor market, businesses are adopting more flexible models, hybrid work models, and hiring freelance workers. We work with many of our talented freelancers across our platform, everything from product and marketing to design, software development, and much more,” Kaufman stated. “We also employ people internationally and use internal training programs. We are open to trying various solutions, and we always question our methods and ideas repeatedly to make sure we do not fall into old paradigms.”

Kaufman is optimistic regarding certain, ongoing trends in the industry. “We are starting to see a shift in the official mindset. I think that the new government, especially our Prime Minister, an entrepreneur himself, understands how important this is,” he explained. “The good news is that in universities today, one out of four students study science or engineering. We hope that the future market will solve its human resources challenges with these future professionals.”

However, the Fiverr CEO pointed to where improvement in education is still needed. “We need to have children that will say that their dream is to be programmers and full-stack developers just as we have the life-long dreams of becoming pilots, fire-fighters, or doctors.”

“The high-tech industry needs to maximize the potential number of its future workforce. It needs to include more populations such as Ultra-Orthodox Jews, Arabs, and more women. English is the primary language used in the industry, so English studies must be improved. Unfortunately, for certain populations, this is a significant barrier. Therefore, language proficiency, along with raising the bar in scientific studies, is fundamental.”

Does your company suffer from the workforce shortage? And if so, how?

“We in Fiverr also feel the changes in the Israeli employment market as a whole and particularly in the high-tech field in recent years and deal with fierce competition on talent,” Kaufman admitted. “The current situation requires us to take a different approach regarding employee recruitment, retention, and development. We invest a lot of resources to ensure we are competitive in this market. However, the situation does not prevent us from meeting our goals, moving forward, and keeping innovation at the core of our business.”

“The influence of the growing competition is primarily evident in the level of investment needed in the recruitment process today. Luckily, it does not affect our progress or growth, but it is without a doubt a challenge we deal with a lot,” he added. “Employees today are looking to find meaning and purpose in their work beyond just their compensation. They are looking to do meaningful work, to be part of something bigger, a company with an exciting, big vision and a guiding purpose. Here at Fiverr, that is what it is all about. In addition, we also encourage curiosity, creativity, and innovation as core values in everything we do.”

“Like in any field of activity in Fiverr, our recruitment process remains true to our core values - recruit talent based on potential, and encourage diversity,” Kaufman continued. “The positive impact that every employee has on millions of people’s lives around the world is a significant advantage for Fiverr. We are changing the future of work and providing opportunities for anyone to build their business, brand, or dreams. We make a real impact on people’s lives.”

As for hiring issues and which positions are most challenging to fill, Kaufman noted that “Today, with the rise of many global companies based in Israel, the gap is mainly in fields such as data, design, and marketing.”

Tom Livne, Verbit CEO and founder

“We have growth goals throughout the company,” stated Tom Livne, CEO and founder of Verbit, which focuses on AI-based audio and video transcriptions. Despite the fact his company has raised close to $300 million to date, Livne admitted there are “challenges in hiring, mainly in the R&D department. The challenge is to multiply our teams in a very short timeline, in very small and competitive employment markets.”

Has the talent shortage affected your product?

“Up until now, our employment brand and smart growth mechanisms allowed us to grow on time, but this is a challenge that might impact our future growth.”

Livne named R&D positions as the hardest to fill, yet, when asked about the possibilities of outsourcing or bringing over staff from abroad, he suggests alternatives. “Importing people can be done, though it needs to be sustainable for the long term. Another idea is to take people who are already here and provide them with a good chance to develop a career and earn more.” He did acknowledge the Israeli government’s policies aiming at remedying the matter but also added that it “is being done already but not at the pace or scope the industry needs.”

How do you deal with such a competitive job market? What gives you an edge over other companies?

“We have a great employee brand, a company with amazing success in the past four years, a great product and value proposition that help make the world more accessible to everyone. And, last but not least, great people, and culture.”

Ronni Zehavi, Hibob CEO and co-founder

One company that is observing the high-tech talent shortage from more than its own hiring point of view is Hibob. “Our platform Bob (HR-tech) is the heart of how our clients manage their people,” explained CEO and co-founder Ronni Zehavi. “Things like retention, culture, DE&I, onboarding, career development are part of how we help our customers to put their people first. We help our customers better understand their organization and make the right hiring decisions based on data and insights from the platform.”

Has the talent shortage affected your product?

“It is obvious that when we want to develop more features to our product and also make it have the right features for every market we serve, we need to align the right talent to push the product forward,” Zehavi explained. “If we are late in hiring product managers, the specks for product engineering will be delivered later, and the product development will be delayed. We are constantly optimizing the hiring plans knowing that we need product managers to lead product development or that we need business development and intelligence to lead product management.”

As for its own workforce, Zehavi pointed to the company’s growth during the past year, “Hibob has increased its team by 70%,” although, he also recognized that “there is a lacking workforce around unique skill sets and talents that have become even more in demand during these times. For example, unique knowledge of languages in certain functions or unique digital platforms that are required for growth.” However, Zehavi finds a silver lining in the post-covid reality. “We feel that there are many opportunities now and people are searching for the right company and position that will fit them to meet their career goals.”

“In this talent market environment and the short term we are open to hiring people with less experience and evaluating them based on their talent and potential,” he added. “We made a strategic decision to try and balance benefits, culture, opportunity, and work-life balance as much as possible because we do not want to be a part of the endless exaggerated compensation battle.”

Do you outsource? What do you think of the idea of importing talent into Israel?

“Yes, we do outsource. We think importing talent to Israel is only a short-term solution that will not scale. Only a fundamental change led by the government will make the needed impact.”

Does the Israeli government need to act?

“Yes, by increased budgets and more programs at the high school level to begin with. We need to encourage more students to learn Tech related fields for their Bachelor’s and Master’s degrees, etc., especially among those that do not have equal opportunities. The government needs to allocate a budget for programs (including boot camps style programs) for professionals transitioning into the different high-tech fields. Not only coding skills need to be developed but also project management, languages, communication, and digital orientation.”

“We are working with organizations that are training people with sciences degrees with the basic skill sets they would need for a high-tech position,”. Zehavi stated. “We invest much in our inclusive and diverse culture - and we are looking for people that can add to our diversity that share our values and that are excited about helping to shape the future of work.”

Avi Snir, Elevation co-founder and CEO

Another company with a unique outlook on the current tech talent shortage is Elevation. On the one hand, the company is very much a part of the ecosystem and is actively hiring. On the other, the services it offers include training programs and bootcamps.

“The talent shortage impacted our product differently,” Avi Snir, Elevation co-founder and CEO pointed. “As we offer a wide range of services to help companies win different challenges related to their talent, the current talent shortage drove us to focus on what companies need the most help with. The Academy as a Service solution was born out of these needs.”

“Our Academy as a Service solution is growing massively,” Snir continued. “Whether it is our Build use case where we build and operate internal capabilities academies to help companies upskill and reskill current employees, or our Buy use case where we build the internal capabilities academies to increase the companies' pipeline and train to hire new employees according to our client’s exact requirements.

What are some companies doing to deal with the talent shortage?

“Our observation is that companies are opening their own internal capabilities academy, and I am glad to say some of them are powered by Elevation's Academy as a Service solution. They are making progress in two main directions. First building talent, meaning re-skilling current employees for new roles. It is easier for someone who knows the company's DNA and culture and has worked there, to shift to a different position internally. Business and Data Analysts are particularly strong candidates for this trend. because they bring a deep understanding of the business and the market. Second, many conduct train-to-hire bootcamps, or buy academies, where the goal is to train junior employees on the company's tech stack and increase productivity from day one.”

“Also, companies take on talented individuals with little to no technical background in order to train them to meet their needs, for example- training people with high English skills and a good sales approach to become sales representatives and even taking exact science or engineering degree graduates to become developers,” Snir explained.

Which positions are the hardest to fill? Why do you think that?

“Due to the mismatch between supply and demand in Israel, as well as globally, companies are struggling in all areas, but in particular with R&D positions. When companies do not wish to hire junior engineers on a long-term basis, they face more difficulties due to a shortage of experienced engineers to fill open positions.” Snir attributed the difficulty to the large growth sprout the ecosystem experienced recently, along with new technological needs from sectors that were considered “traditional,” as well as the desire to hire a “Jack of all trades” for many positions.

As for the outsourcing question, Snir noted that Elevation does not, and that “the idea of importing talent is good in the short term, but only if it is accompanied by real actions in the long term to reduce the local shortage of talented workers. In addition, I think the last steps by the Innovation Minister are a step in the right direction. If we want to import real talent we have to deal with all the Israeli bureaucracy on top of the tax breaks, so the process is low-touch and friction-free.”

The investors’ point of view - Adi Hoorvitch Lavi director of business development at Poalim Hi-Tech

“Poalim Hi-Tech serves startups and technology companies at various stages, as well as venture capital funds. From this point of view, we see the difficulty in recruiting the first few employees in a new venture along with the challenges in increasing headcount in growth companies,” according to Adi Hoorvitch Lavi, director of business development at Poalim Hi-Tech.

She noted two main challenges, “one is the lack of employees, and the other is employees' retention. The retention challenge is a significant concern for technology ventures. Companies provide higher salaries, swags, big luxurious parties, and fancy offices, but other companies might eventually outperform them.”

“In order to avoid importing workforce from abroad, we believe that the solution is to educate new people, from different sectors, and bring them into the high-tech workforce. In order to do so, several measures should be taken, some of which are already in motion,” Hoorvitch Lavi pointed. “We see some companies already established their own academies as part of their efforts to overcome the shortage. Similar approaches are Jolt (a startup that trains non-high-tech employees), the Kamatek program for religious women, and the IIA which accommodates various programs targeting different sectors.”

“Another solution that could enrich the Israeli workforce is opening R&D centers and branches in peripheral cities in the country’s north and south. Thus ensuring the high-tech ecosystem will not be constrained to the Tel-Aviv and Herzliya area. This will also enable a new workforce to join the tech industry, as well as enhance the ecosystem.”

According to Hoorvitch Lavi, “companies understand that the employees are looking for a place in which they can grow professionally and emotionally. We see new startups targeting this space, such as “Growth Space”, as well as companies establishing a hot-line for employees’ emotional support.”

“High-tech is leading Israel forward and therefore we cannot allow ourselves as a community not to develop the right environment and tools for new ventures and growing startups, Hoorvitch Lavi concluded. “As an innovative sector, we believe that there must be innovative solutions that will not include importing employees nor opening R&D centers outside of Israel.”