Increasing the number of skilled and experienced personnel in the high-tech industry is a national objective, and the State of Israel is acting to achieve it. To this end, the Innovation Authority is supporting the cultivation of “coding bootcamps” as an additional avenue for joining the industry and is examining the problem of high-tech employment among older age groups.
The Innovation Authority’s annual reports from 2015 and 2016 warned of an expected shortage of skilled workers in the Israeli high-tech industry. The realization of the ramifications of this shortage led the government to initiate, at the beginning of 2017, a national program to increase the number of skilled high-tech personnel1.The Government Resolution can be seen at: http://www.pmo.gov.il/Secretary/GovDecisions/2017/Pages/des2292.aspx Innovation in Israel 2017 – overview: http://innovationisrael.mag.calltext.co.il/magazine/69?article=9#_ftn1 The program presents this goal as a national objective and is, therefore, enlisting all the relevant governmental bodies, including the National Economic Council, the Innovation Authority, the Director of Employment in the Ministry of Labor, Social Affairs and Social Services and others. The program includes both long-term efforts to increase the potential number of skilled personnel – primarily by increasing the number of under-graduate students in high-tech professions by 40 percent – and short-term actions intended to fully utilize the existing potential.
The Innovation Authority has a crucial role in these efforts, because of its close relationship with the high-tech industry, and as the body responsible for maintaining the industry’s position as a growth engine for the Israeli economy. The Authority’s “Societal Challenges Division”, that began operations a year ago , will lead the development of solutions for the human capital needs and challenges of the high-tech sector and will act together with it towards their implementation.
In this context, we wish to highlight the available reserves of human capital which can be integrated (or preserved) in the high-tech industry. The first such reserve is of highly skilled academics looking for a career change, and particularly graduates of scientific professions. This population is the target audience for extra-academic ‘coding bootcamps’ – fast-track quality programs aimed at enabling high-tech integration for non-high-tech professional graduates.
The second reserve of personnel is senior employees (from approximately age 45 and upwards) in the high-tech industry who, have difficulty maintaining their positions in the high-tech labor market. This issue will be discussed below based on the results of a unique survey examining the employment of senior high-tech workers, conducted by the Innovation Authority in conjunction with the Association of Engineers.
Studying Computer Science or Engineering is Not the Only Way to obtain High-Tech Employment
One of the central questions surrounding the discussion about the shortage of skilled high-tech employees is why it is that the high salary, that reflects the high demand for these workers, is not enough to attract more workers to choose this career path. The significance of the disparity between the average wage in the high-tech industry – NIS 21,000 per month – and the average wage in the economy at large – approximately NIS 9,8002 . This large difference becomes even more significant taking into account the complex high cost of living in Israel. Nonetheless, the figures indicate a more than decade-long stability in the ratio of salaried employees working in high-tech (see Diagram 1)3.compared to a thriving corporate demand for labor expressed by a constant increase in salaries.
There are a number of explanations for this phenomenon. Firstly, high-tech career paths traditionally pass through a relatively limited number of entrance gates, the central ones being academic studies of engineering or computer science or service in the I.D.F. technological units. The entrance thresholds for these tracks are relatively high and filter out many young people interested in joining them including those young people who are endowed with the basic talents necessary for succeeding in high-tech professions. In this context, it should be mentioned that the national program for increasing skilled personnel to the high-tech industry set a target increase of 40 percent in the number of higher education students in high-tech professions. The main thrust of effort in this direction will be undertaken by the universities. In order to achieve the goal, the Planning and Budgeting Committee in the Council for Higher Education is operating in several avenues: expanding the academic staff in high-tech professions, developing the necessary physical infrastructure, reducing the drop-out rate from high-tech professions, increasing the rate of special populations in these fields, especially women, the computerization of courses and others.
Secondly, there is a significant group of young people capable of meeting the academic entrance criteria for engineering or computer science professions but who choose a different route. This is explained by the fact that the striking advantages of the high-tech industry are not at the top of their list of priorities when making a career choice. The choice of study field, which to a large degree shapes their future career path, is generally made in the early 20’s and is based on perceptions and priorities reflected at that point in time. According to an OECD study, young people choose a field of study according to (in descending order) interest, self-fulfillment, future salary and convenience.4 This order of priorities may change during their professional lives, as may their perceptions regarding interest and self-fulfillment at work.
The modern labor market is characterized by frequent changes in demand for different professions. On the other hand, the increase in life expectancy results in careers that may last many long years. The option to change track during one’s career therefore assumes great importance. Today, many young people who previously chose a particular study field are now changing their career preferences after a period of familiarization with the labor market, but the perception according to which a professional change involves a return to academic studies reduces their motivation to embark upon such a move.
The high demand in the high-tech industry for recent graduates of I.D.F technology units illustrates however that academic studies, with all their obvious advantages, are not the only way to become a part of the industry. Indeed, some of the high-tech companies in Israel – especially dynamic software companies that recruit a large number of programmers – adopt selection processes based on talents and abilities, without reference to the candidate’s formal education. This phenomenon is also linked to the increasing demand for programmers throughout the entire market. The existing shortage drives the employers to recruit talented workers via alternative means, thereby creating opportunities for wider circles of the population to join the high-tech industry.
Coding Boot Camps: An Alternative Route to Integration in the High-Tech Industry
It was in light of these circumstances that extra-academic training programs for computer studies began to rise. Of all such active programs, we will focus on those known as “coding bootcamps”. These frameworks –involve intensive, concentrated and demanding training that combines theoretical study with practical application. Programs such as these began to develop in the United States in 2012, due to disappointment from the universities’ inability to meet the increasing demand for workers in technological fields. Among the prominent programs in the U.S. are for example Le Wagon, Ironhack and General Assembly. The demand for studies at these programs is, to a large extent, concentrated among academics who have worked in the profession they studied and are now interested in making a career change to another profession with higher earning potential.
The majority of the programs teach common programing languages and update the syllabus according to market demand. Alongside these, new programs are being developed to offer training in fields such as data science, cyber security, UX/UI, design and marketing5.In addition to knowledge in programming languages, these programs strive to provide their graduates with soft skills vital for the modern labor market including independent learning, teamwork, inter-team work and tools for long-term career development.
The high-quality training programs, and especially those with a business model that is built on rewarding successful placement in the workforce, maintain a scrupulous selection policy and high demands throughout the training. As a result, the typical participant profile is of academic graduates with degrees in science or technology professions and who possess a background that lessens the difficulty of the intensive programming studies.
In order for these programs to succeed in creating a significant flow of skilled workers for the Israeli high-tech industry, they must be attractive both for talented candidates and for the employers searching for skilled workers. Specifically, in order for these programs to expand, an increase in demand for them is required on the part of outstanding academics interested in professional retraining as well as an increase in employers’ demand for graduates. This tool needs to be developed in Israel and is still relatively unknown. Alongside a limited number of veteran programs, new extra-academic training programs have begun to appear in the last two years. As a result, potential candidates still feel uncertain as to the success of these programs because of the investment required from them – in terms of cost, time and intellectual effort6 . Also, the employers’ familiarity with these programs and their potential benefit, remains low. Much work needs to be done.
The success of these training frameworks in the United States reflects their potential: Graduates of coding bootcamps constitute approximately a quarter of all computer personnel completing their studies in 2016 in the country, and are now part of the American high-tech industry, including in leading companies. Therefore, promoting the attractivity of extra-academic training programs, both for potential candidates and for employers, may prove to be the solution for integration into the high-tech industry.
A higher number of quality candidates enlisting in these programs will create a positive reputation for the programs’ graduates and enable their integration into high-quality and well-paid jobs. Such development will also entice additional outstanding academics interested in a career change to sign up for the programs and so on. At the same time, it is important to learn from the shut down of a number of programs in the United States in recent months. These programs either had unsuccessful business models or just some failed to adapt to the changing needs of high-tech employers. Therefore, The Israeli Innovation Authority seeks to encourage the growth of quality extra-academic programming training in Israel. Accordingly, this year the Innovation Authority has launched a coding commando program (see below).
The Innovation Authority – In Practice:
- “Coding Boot Camps” Program – the Innovation Authority has begun supporting extra- academic training programs.
In accordance with Government Resolution No. 2292 passed at the beginning of 2017 (The National Program for Increasing Skilled High-Tech Personnel), the Innovation Authority is currently formulating a number of programs aimed at increasing the number of skilled high-tech personnel in the Israeli workforce. The programs, that will attempt to address the shortage of labor in this sector in the short, medium and long terms, primarily include support for extra-academic programming training. In addition, they will strive for the engaging skilled workers from outside of the country with a special emphasis given to returning Israelis and to those eligible to immigrate.
The Innovation Authority will support extra-academic coding training courses within the framework of the “Coding Boot Camps” program. This program is intended for training companies, non-profit organizations, academic institutions and high-tech companies interested in establishing or expanding such a program.
The Innovation Authority’s effort in this area is divided into two levels:
- The creation of a quality reputation among potential employers and workers by encouraging quality players to enter the arena of training, program supervision and control, and by raising awareness of their existence and potential.
- Enhancement of the market and increasing the number of students in the coding commandos via grants for selected programs. The level of the grant is determined according to the salaries of program graduates employed in high-tech upon completion of the training, that are regarded as an indication of the program’s quality. A higher grant will be awarded to graduates belonging to one of the groups suffering from under-representation in the high-tech sector. The programs may use the grants, among other things, for student stipends, thereby enhancing their accessibility.
The program will operate initially in trial format and its expansion will be considered according to the results. The tender for operating the program will be published towards the end of the year (Q4, 2017).
For further details: http://economy.gov.il/RnD/Programs/Pages/coding-bootcamps.aspx
- The Israel National Braingain Program – Created to engage Israelis with international experience in the Israeli Industry
The national program for returning academic Israelis was created to deal with the increasing demand in the Israeli market for leading academics in their field. These academics have accumulated knolwge, education and international experience. The program started in 2013 as a partnership between the ministry of immigration, the mistry of economy, the ministry of finance and the budgeting committee of the high education council and the Israel Innovation Authority.
The program is open for Israeli academics who live outside of Israel and can become part of the industry, academia and medical institutions in Israel, together with the empolyers in the Israeli Market. In 2016 there were more than 4,000 academics listed and 400 employers active. In total the program has managed to bring back to Israel 900 academics since its inception.
In January 2017 it was decided to change the program so it will be led by the Israel Innovation Authority with an emphasis on the needs of the Israeli High-Tech Industry. The program will be directed towards academics who desire to work in the Israeli High-Tech industry whether they are Israelis living abroad and also potential relevant immigrantes. The Innovation Authority is developing the final details of this program.
Senior High-Tech Workers – an Under-Utilized Resource?
The government is investing much effort in many spheres with the aim of increasing the supply of skilled workers for the high-tech industry. At the same time, we must ensure that the high-tech industry makes full use of their existing human resources in the most efficient possible manner. In other words, the industry’s ability to retain the skilled workers it recruits must be examined.
In the following section, we will discuss the retention of senior high-tech employees7
.Claims have been made by the public and the media that employment in the high-tech sector is unsustainable at later ages, however, these claims have not been proven empirically. High-tech employees are required to continue learning new technologies throughout their careers, some significantly different from those with which they are familiar, and to adapt to unexpected changes such as company closure or the diversion of the business focus from certain areas to others. There are those who believe that the industry’s rapid pace of change, both from a technological and a business aspect, is inherently difficult for older workers. Others indicate that the high salary levels attained by high-tech employees throughout their careers are a millstone, raising the risk of their job termination in times of crisis, in favor of younger and “cheaper” employees hired in their place. Finally, a conjecture exists according to which the industry is characterized by a pyramidical structure, so that workers promoted to middle management roles but not to senior management positions, have difficulty in finding professional fulfillment after age 45.
These claims are not unique to the high-tech sector. A study conducted by the Employment Service on the employment of older workers found that workers aged 45 and above may experience difficulties in retaining their job or in finding a suitable job – in all sectors of the labor market. Indications of these difficulties are represented by the decrease in the level of employment in this age group, and by the increase in the time period needed to find a job8
However, in light of the shortage in skilled high-tech labor, such a phenomenon in this sector would be surprising. If the chances of employment for skilled senior high-tech employees are indeed lower than those of younger workers, this means that the industry fails to utilize all its available human capital reserves. A proven answer to this question is critical in order to formulate appropriate policy tools for resolving the shortfall and for the cultivation of a long-term supply of skilled human capital for the high-tech industry.
Survey of Senior High-Tech Employment – Initial Findings
In order to answer this question, the Innovation Authority conducted a comprehensive survey regarding the employment of senior (older) high-tech workers. The survey was conducted in conjunction with the Association of Engineers, Architects and Graduates in Technological Sciences in Israel. The survey was widely circulated9It should be mentioned that the age influence embodies, for example, the cohort influence, in other words, the influence of demographic or statistical differences between different age groups. An example of such a difference may be the type of technological training given to different cohorts. and a sample of approximately 1,200 respondents was received, comprising employees or former employees in the high-tech sector or professionals from the high-tech industry who are employed or were employed in overlapping fields.
Table 1: Survey Characteristics – Survey of Senior High-Tech Workers
The respondents were asked about their employment situation (salaried employees, self-employed or unemployed), and about various employment characteristics such as the industry to which they work in, their salary range, the type of job/role in which they are employed, education and others. Among those who are unemployed, the survey examined different aspects of the difficulties in finding a new job. In addition, the respondents’ views with regard to the employment situation of older high-tech employees were also examined, including aspects such as obstacles to their employment and advisable solutions. This report provides initial findings from an analysis of the survey results on the basis of which the Innovation Authority will subsequently conduct a thorough study.
Table 1: Survey Characteristics – Survey of Senior High-Tech Workers
The first and most striking finding of the survey is the decline in the rate of employment with the increase in age (see Diagram 2). In other words, age has a negative influence on the chances of finding employment.10 The survey results also reveal that the phenomenon of decreasing rates of employment are more striking among managerial personnel. It should be noted that among the unemployed respondents, the overwhelming majority are actively searching for work and only a small minority had left the labor market entirely. In other words, this is not a trend of early retirement.
A further finding relates to the variation in the employment makeup with age. The ratio of salaried employees declines as the workers increase in age, while at the same time, the ratio of self-employed workers increases. In other words, the picture being revealed shows that throughout their careers, some of the salaried-employees in the high-tech and associated fields, leave the workforce and some become self-employed.
Among those unemployed in the sample group, the overwhelming majority of the older workers (those aged 45 and over), left their previous jobs unwillingly while higher proportions of the younger workers left their last position of their own volition (Diagram 3).11
This does not mean however that the older workers were necessarily dismissed more than the younger employees. It is feasible that the rates of dismissal are similar, but that the younger workers find a new job easier and were therefore not “caught” in the unemployed category when responding to the survey.
Additional findings relate to the widespread conjectures regarding obstacles to the employment of older workers in high-tech. The respondents were asked about the reasons that in their opinion may reduce the attractivity of employing an older worker in the high-tech field. More than half the respondents believe that high salaries constitute an obstacle,12 even though in practice, no indication was found for a negative connection between salary level and chances of employment.13 More than half the survey’s respondents are even of the opinion that the older workers’ failure to keep up to date technologically may reduce the attractivity of their employment. Among the younger respondents (aged 44 and less) this rate even exceeds 60 percent. In this context, the Director of Employment in the Ministry of Social Affairs, together with JDC Israel and the Technion, has recently begun operating a technology refresher course for older software engineers (see below). More than half the respondents even mentioned a difficulty in integrating into a younger social environment, and approximately 30 percent mentioned fatigue and lack of motivation.
The survey also revealed interesting findings regarding the place of the age variable in the shaping of perceptions and feelings linked to employment stability. Firstly, of the total survey sample, the difficulty for older workers in finding a new job is perceived as significant. The degree of perceived difficulty increases however with age – in other words, younger workers perceive the older workers’ difficulty in finding a new job as less significant than the older workers themselves (see Diagram 4). Secondly, the survey shows that the concern regarding future employment grows with age and reaches its peak around age 50, however after this age there is actually a decline in the degree of concern (see Diagram 5). It can be suggested that this trend is connected to the proximity to the retirement age.
If so, an initial analysis of the survey results reveals for the first time that an empiric basis exists for the claims regarding lower chances of employment in the high-tech industry for older workers, especially among the managers. Furthermore, the survey shows that high-tech workers themselves believe that there is an employment difficulty for older workers – a feeling that intensifies with age. Further analytical work is needed however in order to delve deeper into the phenomenon and better understand its various elements. In this context, the endeavor of the Director of Employment in the Ministry of Social Affairs to reintegrate older programmers into the industry (see below) may serve as a pilot for examining some of the survey’s insights, especially the aspect of remaining updated technologically. The Innovation Authority intends to examine the development of additional programs that will provide a response to this market failure and that will aid the integration of older workers.
Reintegration of Older Programmers
The Director of Employment is acting to advance the reintegration of older programmers into the high-tech industry.
As part of the overall effort to address the shortage of skilled workers in the high-tech sector, the Director of Employment in the Ministry of Social Affairs recently launched a technology refresher course for older software engineers (aged 45 and over). The course is a joint initiative together with JDC Israel-Tevet, the Technion, and the “Middle of the Road” program. The refresher course aims to restore to the workforce senior software engineers who have strayed from the field of software development, through study of advanced subjects based on the participants’ relevant previous education and experience.
The course, which is concentrated into four intensive days of study a week with a total scope of 320 academic hours, emphasizes the acquiring of up-to-date knowledge such as Android software, data science, the principles of agile development, and the development of practical skills. Upon completion of the course, the participants work on a product development project in which they can express the knowledge and skills acquired during the program. During the course, the participants also receive ten hours of guidance in various aspects of employment such as updating their C.V. and preparation for job interviews.
The program is offered at a subsidized cost of approximately NIS 3000 while the cost of similar private programs can reach NIS 15000 or more. The first cycle of the program commenced in July 2017 and another is expected to open in November 2017. The program’s future expansion will be considered based on the rates of successful graduate placement.
For further details about the next course: RikiA@jdcnet.org
We wish to thank the office of the Director of Employment at the Ministry of Labor, Social Affairs and Social Services; The Planning and Budgeting Committee at the Council for Higher Education; and to the Association of Engineers, Architects and Graduates in Technological Sciences in Israel for their contribution to this chapter.
- The Government Resolution can be seen at: http://www.pmo.gov.il/Secretary/GovDecisions/2017/Pages/des2292.aspx Innovation in Israel 2017 – overview: http://innovationisrael.mag.calltext.co.il/magazine/69?article=9#_ftn1 ↩︎
- National Bureau of Statistics, Annual Statistics Journal 2017, Panel 12.33 (2016 data) ↩︎
- Calculated after adaptation of NBS data by the Strategy and Economic Division of the Innovation Authority. The adaptation included revaluation and historic adjustment of all salaried employees by retroactively adding the number of salaried employees in the I.D.F. (regular and permanent service) including before 2012 (the year in which the NBS began publishing the total figure). ↩︎
- OECD (2008). Encouraging Students Interest in Science and Technology Studies. Link: http://dx.doi.org/10.1787/9789264040892-en ↩︎
- Stewart, L. (2016, December 07). 2016 Growth of the Bootcamp Model. Course Report. Lik: http://www.coursereport.com/reports/2016-ux-ui-data-science-bootcamp-ma… ↩︎
- This training generally takes a number of months and is conducted in an intensive manner. The student is required to devote himself completely to the training and is unable to work during this period. Aside from the loss of alternative income during the training period, the student bears the cost of tuition that generally reaches at least NIS 20000, in other words, between 60-100 percent of the cost of an academic degree at a public institution. In frameworks at which training is free in exchange for future employment, the cost of training may be even higher and is collected in practice from the graduate’s salary during the two years employment as a training graduate. ↩︎
- It is customary to relate to senior workers as those aged 45 and up. ↩︎
- R. HaCohen (2014). Adult Employment in Israel, Survey on Status of Workers over 45 in the Israeli Labor Market, Israel Employment Service. Link: http://www.taasuka.gov.il/he/InfoAndPublications/Documents/adultsemploy… ↩︎
- The survey was distributed via the internet. ↩︎
- It should be mentioned that the age influence embodies, for example, the cohort influence, in other words, the influence of demographic or statistical differences between different age groups. An example of such a difference may be the type of technological training given to different cohorts. ↩︎
- It should be mentioned that among those who retired, approximately half are also looking for work. ↩︎
- Multi-choice question – other reasons were also indicated with high percentages. ↩︎
- Within the group of unemployed, a higher salary in a previous job was not found to increase the difficulty in finding a new job. In addition, no different salary distribution was found between those employed and those unemployed, both in the total sample group and solely among the older workers. ↩︎