Some 60% of Israeli hi-tech firms say they have difficulties recruiting employees for R&D positions, according to the 2020 High-Tech Human Capital Report from the Israel Innovation Authority and Start-Up Nation Central.
Israeli companies had 13,000 estimated open tech positions as of December 2020, the report said.
Despite the coronavirus pandemic, the number of hi-tech employees rose by a moderate 0.6% throughout the year, to an average of about 334,000 people. There was a relative decline in demand for employees during the year, partly explained by a significant drop in the rate of voluntary resignations, the report found. The impact of the pandemic was severely felt in the second quarter, when many employees were sent on unpaid leave, yet a recovery was evident already in the subsequent quarter.
The report found that the coronavirus crisis halted the positive trends of recent years regarding the increased integration of women and members of the Arab and ultra-Orthodox communities in hi-tech. The year 2020 saw an alarming decline in the number of women who founded technology companies in Israel; stagnation in the ratio of ultra-Orthodox employees out of all hi-tech employees, following five years of continuous increases; and a ten-percentage-point drop in the share of women from the Arab sector out of the overall number of hi-tech employees from the Arab sector, from 42% to 32%.
The study found that the tech sectors that hired the most during the year were mainly software-based, while hardware-related sectors cut their workforce by an average 3%. Meanwhile, biomed, medical and medical device companies showed signs of being an “employee’s market,” as the only sector with increased voluntary resignation paired with a decreased dismissal rate.
Smaller companies were impacted the most by the pandemic, with over one-third saying they were ”severely affected” by the crisis, the report found. Smaller companies were more likely to have frozen recruitment, faced a decrease in the number of experienced technological employees, and reduced their demand for tech positions in relation to their workforce.
The report found indications that the coronavirus crisis may have influenced companies’ attitudes toward employing junior employees with under two years of experience. Along with a 24% decrease in the number of juniors employed among companies that reported being “severely affected” by the crisis, there was a 37% increase in the number of juniors in companies that reported being positively affected by the crisis.
“The human capital shortage in the hi-tech industry remained high even during the global crisis, demonstrating its chronic nature,” said Uri Gabai, CO-GM of Start-Up Nation Central. “We expect increased demand for technological solutions which will in turn lead to an increase in demand for employees capable of developing these solutions. The increased demand will not be limited to the hi-tech industry; it will also appear in other industries undergoing a digital transformation. The resolution to this chronic shortage can likely be found in systematic, cross-sectoral collaborations which will create widely implementable solutions.
“Without an extensive integration of women and members of the Arab and ultra-Orthodox communities into the hi-tech industry, Israel’s main growth engine will have no fuel to run on. I hope the post-pandemic normalization will also include resuming the favorable trend of integrating underrepresented populations in the hi-tech industry.”