The government’s plan to import foreign engineers for the hi-tech industry is not an adequate solution to the labor shortage. Hi-tech companies must act and remove entry barriers to employing college graduates and staffing needed positions. The government, in conjunction with the hi-tech industry, should step in and establish a national training and qualification program.
Science and Technology Minister Orit Farkash-Hacohen recently announced an initiative to “import” foreign workers for the hi-tech industry. The industry has been suffering for several years from a significant shortage of skilled and professional labor. The shortage is mainly due to the gap between the huge growth rate of start-up companies and large enterprises versus the output of graduates in needed technological professions from the country’s academic institutions. The impact of this shortage on the hi-tech industry is huge. First and foremost, scarcity accelerates an unrealistic salary increase across the technological professions and consequently increases the wage expenses of most companies. In addition, due to the shortage of engineers, many companies also face significant delays in projects, which ultimately cause revenue loss. In order to mitigate these risks, quite a few companies outsource from Eastern Europe, India and China. Beyond the fact that large outsourcing expenses lead to significant capital exodus, this can create major strategic risks, such as leaked technological knowledge and reducing the competitiveness of Israeli hi-tech.
The minister’s initiative is essentially positive but provides a very limited solution to the risks and problems described at the outset. In many cases, outsourcing ultimately tends to employ engineers with limited skills and experience, so staffing a single position at the needed level may require multiple outsourced engineers. So, what is the solution to this emerging problem?
For context to the discussion of possible solutions, it should be noted that in the training process in the core technology areas, such as chip design, algorithms, software, artificial intelligence, and cyber, is long – there are no shortcuts. However, the shortage today includes not only engineers in the core technology fields, but also those who are considered to be support engineers, such as quality assurance, validation, IT, network and infrastructure managers, whose training is significantly shorter compared to the core technology fields. Thereby, before seeking foreign engineering resources, it would be highly desirable to thoroughly investigate possible local solutions:
Recruitment of skilled graduates from academic colleges: Given the shortage in the technological labor force, the role of academic colleges in Israel becomes crucial in training the needed technological manpower. According to a report by the Central Bureau of Statistics, the number of graduates in the technological areas is quite similar between universities and academic colleges. Thanks to the widespread locations of academic colleges, a significant segment of the population has the opportunity to receive technical education. Furthermore, most colleges have undergone significant upgrades, adapted their academic curricula, and trained their staff according to the changing needs of the hi-tech industry.
Despite the significant contribution of academic colleges, there is still a notable gap in employment outcomes. While university graduates are captured by headhunters and recruiters even before graduation, college graduate recruitment is insufficiently utilized in the hi-tech industry. According to the State Comptroller’s report for 2021, 75% of those employed without experience in the hi-tech industry are university graduates, 22% are college graduates, and 3% were employed directly after military service. The reason for this phenomenon is mainly due to the fact that companies place entry barriers for academic college graduates, largely due to unfamiliarity with the colleges’ academic rigor and curricula.
College graduates can staff open positions in core technology fields, but also can meet the demand for support engineers in many hi-tech companies. Hiring college graduates does not imply compromising the level of expertise and the quality of personnel. Furthermore, maintaining entry barriers for such graduates while demonstrating a preference for recruiting foreign outsourced engineers not only fails to serve the national interest, but also undercuts the business interests of hi-tech companies.
Rapid skill acquisition and retraining courses: Due to the severity of the situation, the government, in conjunction with the hi-tech industry, should ideally establish a national training and qualification program, in consultation with academic staff and experienced engineers from industry. In addition, the government should provide incentives to encourage hi-tech companies to offer training programs so that engineers can switch career paths from various industries to hi-tech.
Encouragement and incentives for students: Beyond short- and medium-term solutions, there is major interest in motivating students to enroll in hi-tech courses. First steps are already being taken by the Education Ministry as part of the national five-year plan to encourage technological professions from an early age. These measures should be further supported due their major benefits, not only in reducing the labor shortage gaps in the long run, but also in reducing the socioeconomic gaps in Israeli society.
The government and the hi-tech industry must act urgently to utilize the existing labor force from academic institutions in Israel, in order to reduce the shortage of engineers. Additionally, companies must develop and strengthen their connections with academic colleges, to grow the recruitment pool of a technological workforce. It is highly advantageous for the government to bolster the industry with these initiatives before looking abroad for engineers.
The writer is head of the Artificial Intelligence Lab at the Ruppin Academic Center.