{"id":3111,"date":"2020-02-26T11:31:00","date_gmt":"2020-02-26T11:31:00","guid":{"rendered":"https:\/\/innovationisrael.org.il\/en\/?post_type=press_release&#038;p=3111"},"modified":"2023-10-22T06:54:22","modified_gmt":"2023-10-22T06:54:22","slug":"2019-high-tech-human-capital-report","status":"publish","type":"press_release","link":"https:\/\/innovationisrael.org.il\/en\/press_release\/2019-high-tech-human-capital-report\/","title":{"rendered":"2019 High-Tech Human Capital Report"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The share of high-tech employees continues to grow, crossing the 9% threshold for the first time, aligned with the high demand for technological employees (18,500 open positions) and signs of a continued shortage of skilled human capital<\/strong><\/h2>\n\n\n\n<p><\/p>\n\n\n\n<p class=\"has-text-align-center\">Burgeoning trends that will increase the supply of human capital in the long term include a rising number of academic graduates, the recruitment of graduates from alternative training programs, and an increase in inclusive employment (Arab and ultra-Orthodox populations constituted 14% of the growth in high-tech employees between 2017 and 2018). Nonetheless, the offshoring trend continues, the percentage of women in high-tech has remained stagnant, and only 45% of high-tech companies engaged in recruiting inexperienced employees (juniors).<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-color\" style=\"color:#b70075\"><strong><u>Key findings from the report:<\/u><\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The number of high-tech employees increased significantly for the first time in years: as of the end of 2019, there were 321,000 employees in high-tech, accounting for 9.2% of all Israeli employees and representing an 8% increase over the year. The demand for high-tech employees, and tech employees in particular, is on the rise, with an estimated 18,500 open tech positions in the industry as of July 2019 \u2013 an increase of 8% compared with July 2018. However, an examination of the actual volume of tech employees that high-tech companies were willing to recruit during the year (the combined total of the number of open positions and recruitments made) shows their percentage out of the overall number of high-tech employees remained similar between 2018 and 2019, at about 12%.<\/li>\n\n\n\n<li>Survey results showed that 7 out of 10 employees in the high-tech industry were in tech positions, with a significant increase in their weight among multinational corporations.<\/li>\n\n\n\n<li>In July 2019, 40% of open positions were in the areas of software and product infrastructure. Cyber and algorithms\/data scientist roles led in the percentage of open positions per existing employees in those positions (33% and 15% respectively), indicating&nbsp;a relatively high demand for these professions.<\/li>\n\n\n\n<li>In 2018, the average salary in the high-tech industry (including both technological and non-technological roles) was NIS 22,479 per month, compared with an average wage of NIS 9,345 in the rest of the economy, excluding the high-tech industry. According to an analysis conducted by Zviran of the most sought-after high-tech professions, there is a positive premium \u2013 ranging between 1.5% and 8.6% \u2013 between the wages of newly recruited employees compared with those of existing employees in identical positions, indicating high demand.<\/li>\n\n\n\n<li>Average employee expenses for a full business R&amp;D position among multinational R&amp;D centers \u2013 whose number jumped by 143% this past decade \u2013 are on average 40% higher than those of local firms.<\/li>\n\n\n\n<li>Of local companies that participated in this year\u2019s survey, 27% reported an overseas R&amp;D\/QA center.<\/li>\n\n\n\n<li>The percentage of women in high-tech remains stagnant (more on this below).<\/li>\n\n\n\n<li>There has been significant improvement in the inclusion of the Arab population in high-tech: the share of Arab employees of out total high-tech employees increased by 23% between 2017 and 2018, and by 116% between 2012 and 2018.<\/li>\n\n\n\n<li>For the first time, 3% of the companies that recruited juniors and reported the training institution they came from confirmed that they had recruited employees who graduated from bootcamp training.<\/li>\n\n\n\n<li>There is still relatively little employment of juniors (employees with up to two years of experience); only 45% of companies that answered this survey question reported recruiting inexperienced tech employees during the first half of 2019.<\/li>\n\n\n\n<li>Since 2017, the shortage of skilled human capital in the high-tech sector has garnered public attention, and a variety of government and independent programs (both private and third-sector) have been launched to increase the supply, particularly among underrepresented populations, with evident positive results (more on this below).<\/li>\n<\/ul>\n\n\n\n<p><strong>Prof. Eugene Kandel, Start-Up Nation Central CEO:<\/strong><\/p>\n\n\n\n<p>\u201cThe continued growth of Israeli high-tech and Israel\u2019s economic strength is dependent on the root treatment of the shortage of technological human capital. I call on high-tech companies to adopt inclusive approaches&nbsp;to employee recruitment and integration in their organizations. The \u2018bring a friend\u2019 referralmethod was an efficient way to recruit employees in the early decades of Israeli high-tech, but now there is a clear need to break past familiar boundaries and recruit employees from diverse backgrounds as well, beyond 8200 Unit or university graduates. Policies encouraging women and other sectors of Israeli society to join the unprecedented success of the high-tech industry must be set. Companies that fail to adopt this approach will restrict themselves to a limited supply of employees and miss out on quality talent pools.\u201d<\/p>\n\n\n\n<p><strong>Aharon Aharon, Israel Innovation Authority CEO:<\/strong><\/p>\n\n\n\n<p><strong>\u201c<\/strong>It has been three years since the passing of Government Resolution No. 2292 to Increase Skilled Manpower for the High-Tech Industry. The resolution created a broad action plan, involving a variety of relevant governmental entities, which includes long-term efforts such as setting a national goal of a 40% increase in the number of undergraduates pursuing high-tech studies in subsidized higher education institutions, particularly universities. The program also includes short- and medium-term efforts as well, to realize existing potential (particularly among women and underrepresented populations in high tech), broaden the entrance channels to high tech, and optimize the use of a skilled workforce from abroad. This year, after much effort, we have seen a significant increase in the number of high-tech employees: as of the end of 2019, there were 321,000 employees in high tech, accounting for 9.2% of all Israeli employees and representing an 8% increase (24,000 employees) in the past year. It is important to emphasize, as shown in this report, that we face a shortage as much in quality as in quantity. This is why the emphasis in most programs is on maintaining a high level of quality, which will provide clear solutions for the industry\u2019s needs. It is therefore crucial that the high-tech industry continue and even increase its involvement in these programs.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><u>Additional key findings from the report<\/u><\/strong><strong>:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Salary growth in high-tech<\/strong><strong>:<\/strong>&nbsp;In 2018 the average salary in the high-tech industry (including both technological and non-technological roles) was NIS 22,479 per month, compared with an average salary of NIS 9,345 in the rest of the economy, excluding the high-tech industry. In addition, the growth rate for high-tech salaries was higher than for other industries,increasing by 27% over the past six years compared with 15% for rest of the economy.<\/li>\n\n\n\n<li><strong>Low ratio of tech recruitments to open tech positions, indicating that high-tech companies are having difficulty recruiting tech employees:&nbsp;<\/strong>The low ratio (1.05) between the number of tech recruitments made between January and June 2019 compared with the number of open tech positions in July 2019 suggests that high-tech companies find it more difficult to recruit tech employees and therefore do not attempt&nbsp;to spread their recruitments over an extended time frame.<\/li>\n\n\n\n<li><strong>High voluntary departure rates signal an \u201cemployees\u2019 market\u201d:&nbsp;<\/strong>Voluntary departure rates, according to an analysis conducted by Zviran, reached 10.2% of high-tech employees in 2018 \u2013&nbsp;an increase of 1 percentage point from the previous year and an indication that employees expect to find work that is similar to or better than their current roles.<\/li>\n\n\n\n<li><strong>Intensification of the offshoring trend:<\/strong>&nbsp;Of the local companies that participated in this year\u2019s survey, 27% reported offshoring centers, compared with 22% in the previous survey. Similar to last year, half of the companies that reported offshoring activities had established them in the last two years, which seems to indicate that this phenomenon is intensifying. Most of this activity is focused on R&amp;D and not just QA.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-text-color\" style=\"color:#b70075\"><strong><u>Solutions to the Human Capital Shortage: Diversification and Inclusion of Populations Underrepresented in High Tech<\/u><\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>About two-thirds of high-tech employees are non-Orthodox Jewish men. The share of Arab and ultra-Orthodox employees stood at 5% in 2018. However, there was a significant increase between 2017 and 2018, with employees from the Arab and ultra-Orthodox populations accounting for 14% of the increase.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Inclusion of Women in High Tech<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Despite an increase in the overall number of women employed in the high-tech industry, their share \u2013 which in 2018 stood at approximately one-third of all employees \u2013 has not risen in recent years.<\/li>\n\n\n\n<li>A deeper examination of women\u2019s representation in high-tech roles, based on survey data, reveals an even more serious situation, with rates dropping to 22% for technology positions and 18% for technology management positions.<\/li>\n\n\n\n<li>The report\u2019s data shows that&nbsp;the higher the age group, the smaller the share of women in high tech. This is particularly apparent in the group that corresponds to the age at which many women become mothers: 25-44 years.&nbsp;A certain stability exists in the ratio between genders in the 35-44 and 45-54 age groups, indicating that women who remain in the high-tech industry after early parenthood are not more likely to leave the field than are men of the same ages.<\/li>\n\n\n\n<li>At later ages, closer to retirement, the ratio of men to women again increases. One possible explanation for this dynamic is the option of earlier retirement for women than men. However, it is presumed that there is also an intergenerational factor, as the 55+ age group belongs to a generation for which women\u2019s representation was low in the first place compared with the current day.<\/li>\n<\/ul>\n\n\n\n<p><strong>Inclusion of Arabs in High Tech<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A substantial positive trend was evident among the Arab population \u2013 Arab employees constituted 9% of the increase in the number of high-tech employees between 2017 and 2018, and for the first time their representation among the overall number of&nbsp;high-tech employees crossed&nbsp;the 2% threshold in 2018.&nbsp;Despite this positive trend, the share of Arabs out of the overall number of high-tech employees is still low compared with their share of the general employment market.&nbsp;Furthermore, data from the \u201cRoute to High-Tech Industry\u201d research shows that the percentage of Arabs in development positions in high tech is even lower.<\/li>\n\n\n\n<li>However, the potential growth trend of Arab employees in technological positions in the high-tech industry is positive, as the Council for Higher Education in Israel\u2019s data indicates a significant&nbsp;increase in the number of Arab students engaged in high-tech studies at academic institutions.&nbsp;Between 2012 and 2018, the number of undergraduate students enrolled in these majors has more than doubled. In the coming years, a rapid and proper integration of these graduates will be one of the core aspects of reducing the shortage in technological manpower in the high-tech industry.<\/li>\n<\/ul>\n\n\n\n<p><strong>Inclusion of Ultra-Orthodox in High Tech<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Despite an increase in recent years, representation of the ultra-Orthodox population in the high-tech industry remains low, standing at approximately 3% \u2013 primarily ultra-Orthodox women. As with other underrepresented populations in high tech, representation declines when examining the share of ultra-Orthodox in technological positions.<\/li>\n\n\n\n<li>A comparison between the report\u2019s data and data presented in the \u201cRoute to the High-Tech Industry\u201d study shows that in 2014, one-third of ultra-Orthodox high-tech employees \u2013 0.7% out of 2.1% \u2013 were in development positions.&nbsp;From this we can draw that the challenge with this population is twofold: increasing the number of employees participating in high tech while also integrating them into tech positions with higher salaries.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-text-color\" style=\"color:#b70075\"><strong><u>Solutions to the Human Capital Shortage: Training Inexperienced New Employees \u2013 Juniors<\/u><\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>There is still considerable reservation in recruiting employees with less than two years of experience (juniors), even those who have graduated with relevant academic degrees. Of the companies that responded to this question in the survey, 45% reported having recruited technological juniors in the first half of 2018 (1,351 employees).<\/li>\n\n\n\n<li>According to report\u2019s findings,&nbsp;the larger the company, the more open it is to the possibility of hiring inexperienced employees. During the first half of 2019, the percentage of large and medium-sized companies that recruited juniors \u2013 72% and 57% respectively \u2013 was significantly lower than that of giant companies, of which 92% had recruited employees with little experience. These figures show that there is still unrealized potential in the hiring of inexperienced employees.<\/li>\n\n\n\n<li>The vast majority of juniors arrive from academic institutions, however the survey also shows juniors arriving from non-academic training programs such as technological army units (8%) and, for the first time, bootcamps (3%). This is an initial and important indicator of the establishment of alternative training models outside of academia.<\/li>\n\n\n\n<li>There is a significant disparity between the percentage of junior tech employees who are university graduates (almost 60%) and those who are college graduates (26%), despite a similar number of graduates in high-tech studies from both types of institutions.<\/li>\n\n\n\n<li>One of the most promising avenues for integration at the junior level is for students to start working in high tech while they are still in school. The survey data shows that 58% of students employed in the high-tech industry are hired by the same company upon graduation.<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Integration of High-Tech Employees over the Age of 45<\/u><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The report\u2019s findings show&nbsp;that employees aged 45 and above comprised 29% of all employees in high tech. This corresponds with CBS data, after adaption by Israel Innovation Authority, which shows that the representation of workers aged 45 and above among high-tech employees has not changed significantly over the past five years, remaining stable at a rate of 30% to 32%.<\/li>\n\n\n\n<li>It is evident that here as well, larger companies are more likely to employ a higher percentage of employees aged 45 and above. Possible explanations for this finding are the ability of large companies to provide long-term career planning, and the fact that some of these companies have been established longer and thus employ workers who started with them at an earlier stage of their careers.<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Integration of Foreign Experts<\/u><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Of the companies participating in the survey, 12% reported that they collectively employ a total of 116 foreign experts, which accounted for less than 1% of the total workforce in these companies.<\/li>\n\n\n\n<li>73% of the companies reported that they did not recruit foreign experts because they did not need to. Despite that, it seems this channel is not common in Israel and thus not \u201con the radar\u201d of many firms.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center\"><strong><a href=\"https:\/\/innovationisrael.org.il\/files-en\/High%20Tech%20Human%20Capital%20Report%202019%20-%20English_25.02-compressed.pdf\">TO DOWNLOAD FULL REPORT IN ENGLISH<\/a><\/strong><\/h3>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center\"><strong><a href=\"https:\/\/innovationisrael.org.il\/files-en\/High%20Tech%20Human%20Capital%20Report%202019%20-%20Hebrew_compressed.pdf\">TO DOWNLOAD FULL REPORT IN HEBREW<\/a><\/strong><\/h3>\n","protected":false},"excerpt":{"rendered":"<p>The share of high-tech employees continues to grow, crossing the 9% threshold for the first time, aligned with the high demand for technological employees (18,500 open positions) and signs of a continued shortage of skilled human capital Burgeoning trends that will increase the supply of human capital in the long term include a rising number [&hellip;]<\/p>\n","protected":false},"featured_media":5482,"parent":0,"template":"","geographic_location":[96,114,111,107,112,108],"collaboration_opportunities":[97,98,99,100,102,101],"mini_site_category":[],"class_list":["post-3111","press_release","type-press_release","status-publish","has-post-thumbnail","hentry","geographic_location-europe","geographic_location-india","geographic_location-japan","geographic_location-latin-america","geographic_location-singapore","geographic_location-united-states","collaboration_opportunities-academia","collaboration_opportunities-enterprise","collaboration_opportunities-entrepreneur","collaboration_opportunities-government","collaboration_opportunities-investors","collaboration_opportunities-media"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.4 - 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