It seems that there is no other industry in the Israeli economy that receives such in-depth analysis of the identity of its employees– whether it's because they have the capital to do so, the impact and contribution the industry has to the economy or simply because the data is available. A new report published today (Monday) illustrates what’s what when it comes to human capital within the Israeli high-tech sector– and some interesting insights left us with some questions.

The decline in demand for juniors

One of the most interesting points that emerged from the new report done by Israel’s Innovation Authority and the Start-Up Nation Policy Institute relates to juniors. Although companies have been celebrating with big hires, it is young workers who get the short end of the stick.

Because the industry has been booming, a lot of people have been trying their luck to try to get in on the action–which means HR personnel saw far more experienced workers interested in positions than usual. It is these experienced workers that were given the jobs; of all new hires for research and development positions in 2021, only 22% of them were juniors, compared to 32% in 2020.

The report shows that among the companies that did employ juniors, they were either smaller companies, comprised of up to 10 employees total or very large corporations. Apparently, the rationale behind this is that large companies have the time and resources to train junior workers, while the smaller companies simply couldn’t compete for more experienced workers and had to settle for juniors.

Half of 2021’s high-tech workers came from outside the industry

Another interesting statistic in the report is that half of the jobs filled in 2021were done so by non-high-tech workers – including academics, workers from other industries, or workers who were generally new to the workforce. However, the industry is still largely composed of technological workers as they make up about 70% of all high-tech jobs. An additional 25% work on the business side of things, while 5% hold senior positions.

The year of the Great Resignation

Just like in many places around the world, in 2021, one in ten workers in the high-tech industry resigned. According to the report, this is a continuation of the "great resignation" trend observed globally – but especially in the United States – in which people have decided to leave their jobs after or during the COVID-19 pandemic in search of better working conditions or better jobs. With that said, interestingly enough, most workers who quit did so from small companies. Companies with 1-10 employees accounted for 37% of resignations, companies with 11-50 employees accounted for 17.5% of resignations while companies with 51-200 employees accounted for 10% of resignations.

At the same time, though many companies saw a lot of resignations, they almost completely avoided layoffs. The rate of dismissal within the high-tech sector was 2.6% - which is the lowest it has been in the last decade.

Despite this data - it is important to take the report with a grain of salt. Most of the data from the Innovation Authority and SNPI's report is relevant to 2021 when the industry was still in its peak year, so it's important to remember that these are probably not the trends that reflect the current market situation.

The situation for women continues to be dismal

Women are still under-represented in the high-tech industry– even in 2022. According to a survey conducted among companies, the proportion of women in research and development is 21%, while the proportion of women in managerial or leadership positions in these fields is 17%.

The overall proportion of women in the industry ranges from 25% to 30%, and in the past year, there has been no increase in that percentage. The report does show that more women are employed in R&D positions in development centers of international companies in Israel than those of Israeli companies, and that small companies tend to avoid employing women, which is relative, as their percentage of overall employees is lower.

Most technological workers come with a degree to prove it

Workers with higher education still make up the vast majority of workers in the high-tech industry, with 80% of technology workers in their first job coming with a degree from some academic institution. Of these employees, university graduates lead significantly as they make up 60% of all employees with higher education, while 36% come from colleges and the other 4% come from academic institutions abroad.

However, interestingly enough, there is an increase in the number of employees starting in high-tech who do not have any academic training, accounting for about 13% of workers. According to SNPI and the Innovation Authority, most of these workers actually have no academic education at all.

The shortage is still severe

Although last year was a record year for the industry in terms of capital raised and growth, high-tech companies are still struggling to recruit new employees for technological positions. According to data from the report, from March-May of this year, there were about 33,000 vacancies in the Israeli high-tech sector. Moreover, according to the data, most of the positions that were filled were for non-technological positions, yet there are still about 12,000 such positions left unfilled. There are still, however, about 20,000 vacancies in technological positions, similar to the level recorded before the COVID-19 pandemic.