Israeli engineers are nearly as costly as Americans

Number of engineering graduates and shekel-dollar exchange rate pushes up price of Israeli engineers; top Spanish, Indian, and Chinese salaries.

January 18, 2011 23:19
2 minute read.
PM Netanyahu's pay stubb, released by the PMO

Netanyahu's tlush pay stub salary 58. (photo credit: Courtesy)


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Foreign companies frequently remark that the cost of employing Israeli engineers is close to that of American and European engineers.

Figures published by the Israel Association of Electronics and Software Industries (IAESI) on Tuesday comparing the salary costs of engineers around the world found that the gap is narrowing.

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The IAESI report showed that to employ an Israeli engineer costs $114,000 a year compared with $130,000 for an American engineer and $145,000 for a British engineer. Israeli engineers are more expensive than their Spanish counterparts who cost $95,000 a year, while an Indian engineer costs $50,000 and a Chinese engineer costs $36,000 a year.

IAESI chairman Yehuda Zisapel said that the cost of an Israeli engineer has been influenced by the shekel-dollar exchange rate, which makes an Israeli’s salary more expensive when converted to dollars. The lack of engineers in Israel, he said, is also pushing up salaries.

“There is strong demand for engineers in Israel in relation to the number of engineering graduates from colleges and universities,” said Zisapel.

According to the IAESI report, the number of engineering graduates is not rising. Israel has had 3,300 engineering graduates from universities annually for the past 15 years, and 4,500 graduates from colleges annually for the past eight years.

“Israeli hi-tech has more than tripled in size over the past 15 years and that explains the difficulties,” said Zisapel. “The hi-tech industry has to cope with the problem of salary costs of engineers while companies are transferring projects to India, China and Eastern Europe.”

Most of the rise in R&D is being undertaken abroad – 80% outside of Israel and only 20% in the country.

“Amdocs has 8,000 employees outside of Israel and NDS has 1,600 employees overseas. Some of these jobs could be in Israel,” said Zisapel. “This trend is strengthening with more jobs going abroad and less staying in the country. It is not only the east which is competing with Israel but the US too. All the leading venture capital funds are in the US and huge companies such as Google, IBM and Microsoft. The competition from the east is tough and both India and China have large and developed high tech industries with hundreds of thousands of new engineers trained each year.”

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