Andrii Bezruchko
CEO and founder of Newxel

Talent Dilemma: No Time for Sentiment

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Israel: The Startup Nation Leading Global Innovation

Israel has earned its leadership position on the global map of innovators. With a record number of startups per capita, cutting-edge technology companies, and groundbreaking research and development, Israel is rightly called the “Startup Nation.” In 2023 alone, over 98 Israeli unicorns raised $44 billion, and companies like HiBob, Wix, and Check Point continue to make significant impacts worldwide. This innovative spirit is embedded in Israel’s DNA, fueling a dynamic tech ecosystem that punches well above its weight.

Rising Global Competition

However, the competition is getting more severe. Countries worldwide are increasingly realizing the value of innovation and setting strategic goals to dominate as global innovators. For instance, China’s spending on R&D reached $378 billion in 2020, reflecting its ambition to lead in AI, biotechnology, and quantum computing. The European Union, through its Horizon Europe program, has earmarked nearly €100 billion for research and innovation over the next seven years. The United States continues to be a formidable force, with significant investments in emerging technologies and a robust startup ecosystem.

Key Factors in Innovation Leadership and Israel’s Bottleneck

When comparing these innovation-leading countries’ criteria, several key factors emerge: the availability of skilled talent, investment in R&D, supportive regulatory environments, and robust infrastructure. Israel excels in many areas but faces a significant and urgent risk that could restrict its innovation potential. Talent shortages, skill gaps, and the brain drain of highly educated professionals to other countries are pressing concerns. According to the Israel Innovation Authority, the country faces a shortage of 18,500 high-tech workers. This gap is a critical bottleneck that could hinder Israel’s ability to maintain its innovative edge.

Global Strategies to Attract Skilled Talent

It’s important to realize that the race for talent has become a global trend. Developed countries are acutely aware of this challenge and address it effectively. For example, Germany’s Blue Card initiative aims to attract highly skilled workers from non-EU countries by offering favorable working conditions and pathways to permanent residency. Singapore has launched the Tech. Pass visa to attract top-tier tech talent from around the globe, offering flexibility and numerous benefits to entice experts to its shores. These proactive measures are designed to build a robust talent pipeline, essential for sustained innovation and economic growth.

Outstaffing: A Viable Solution for Israeli Tech Companies

While 25% of Israeli tech companies use outstaffing as a reliable strategy for growth and performance, the rest often focus on the challenges it may present. However, it’s important to note that partnering with an experienced outstaffing firm can effectively address these challenges and bring about significant benefits. For instance, a good outstaffing partner will ensure legal and regulatory compliance, provide comprehensive onboarding processes to integrate remote workers seamlessly and implement tools to foster effective communication and collaboration. Additionally, outstaffing can offer cost efficiency by optimizing resource allocation and reducing overhead costs, thereby enhancing the company’s performance and growth potential.

Supporting Business Continuity Through Global Talent Integration

In discussions with prospective tech companies considering outstaffing, I often hear that Israeli tech founder and CEOs feel a deep gratitude and responsibility for those tech talents currently on military duty and some guilt about this approach. However, it’s important to understand that this sentiment, while humanly understandable, does not betray these talents. In fact, embracing global talents compliantly can bridge immediate talent gaps, allowing companies to maintain their growth trajectory and innovate. This approach supports the business and sustains the broader ecosystem, ensuring that when local talents return from duty, they rejoin robust, thriving companies.

About the Author
Andrii Bezruchko, CEO and founder of Newxel company. Newxel stands as a global IT staff augmentation powerhouse, excelling in full-cycle tech recruitment services and R&D center development. Newxel has established a prominent presence across 11 locations worldwide, driving revenue of around $20M. Prior to that, he spent more than 20 years developing software and building and managing development teams and R&D centers worldwide, donning hats as CTI/CIO and Director of R&D across diverse companies.