Why are Israeli hi-tech companies bracing for conflict in Ukraine?

“It’s going to affect lots of Israeli hi-tech companies that are really relying on teams in Ukraine to develop and support their day-to-day business,” according to Israeli Blend CEO Yair Tal.

 Tanks of the Ukrainian armed forces are parked on the roadside during a withdrawal near the village of Nyzhnje in Luhansk region, Ukraine, October 5, 2015. (photo credit: STRINGER/ REUTERS)
Tanks of the Ukrainian armed forces are parked on the roadside during a withdrawal near the village of Nyzhnje in Luhansk region, Ukraine, October 5, 2015.
(photo credit: STRINGER/ REUTERS)

As tensions mount between Russia and Ukraine, Israel is bracing itself for potential shortages in grain, construction materials, and, quite possibly, eggs. However, another industry in the Start-Up Nation stands to be heavily affected in the event of a potential conflict: hi-tech.

“You don’t need to be too smart to see that something is happening - something’s going to happen,” said Yair Tal, CEO at Blend, an Israel-based start-up that provides localization services to businesses around the world.“It’s going to affect lots of Israeli hi-tech companies that are really relying on teams in Ukraine to develop and support their day-to-day business.”
He explained that Ukraine is a crucial element of the Israeli tech industry, as many tech companies in Israel outsource their work to the Eastern European nation. The benefits are plenty. A lower cost of living means that the work is less expensive, sharing the same timezone means closer communication with headquarters, and Israel’s history with taking in Ukrainian immigrants means fewer cultural barriers to overcome.
“If you speak with any team in Ukraine today, and you ask who’s actually giving them a job offer, you will see that a lot of Israeli companies are actually competing on the talent there,” he said. “It’s really become the second country after Israel to find and fight for the right talents to join your company.”
Blend’s connection with Ukraine is even closer than the average company’s. Rather than merely outsourcing, they fully employ a Ukrainian branch of 45 workers with whom they work closely. With such a significant portion of their workforce under threat, stress levels are high.
 Ukraine's biggest national flag on the country's highest flagpole and the giant 'Motherland' monument (credit: REUTERS/VALENTYN OGIRENKO) Ukraine's biggest national flag on the country's highest flagpole and the giant 'Motherland' monument (credit: REUTERS/VALENTYN OGIRENKO)
“We have enough time to prepare ourselves and build redundancy to support our business if something is going on over there,” he said, but besides the business aspect, the idea of having employees under fire is a grim prospect.“They’re part of the DNA of our company, literally part of the family that founded the company. Those are our friends; we care a lot about what’s happening in their life, and with their families,” he said.
That sentiment carries across the industry, as HR departments scramble to find contingencies for every outcome.Ruth Ben Asher-Lavi is the vice president of human resources in Europe and Israel at transcription and captioning platform developer Verbit. She expressed that since the very beginning of the rising tensions, her department has been bracing itself.
“When the first news about something going on in Ukraine emerged, we already put a plan for contingencies in place.”
She explained that Israel is well suited to deal with this kind of issue, as it’s far from a typical “quiet country” as far as conflict goes.
“We, as Israelis, we know the drill. We have our weeklies on the situation. We have our follow-ups on the news. We have a plan B in place for every area: finance, IT, business contingencies, emergency contacts, and so on. We had a party for Christmas, just three weeks ago. Nothing seemed dangerous or risky, but we, as Israelis, we know that it’s better to be prepared.”