The layoffs in the Israeli hi-tech

 A Blessing in disguise – the layoffs are actually balancing the Israeli hi-tech

Over the past weeks the economic press has been focusing on the hi-tech crisis. While the headlines cry out “massive layoffs”, the truth is far from it. In fact, the situation is very different according to the SNPI and Israel Innovation Authority report.  

Do the math

Reading this report actually shows that the numbers have a different story to tell.

The report clearly shows that although there are layoffs in the Hi-tech sector, and even a halt in the recruitment process in many companies, these actions were mainly intended to balance the market and bring it back to its’ pre -Covid state. Therefore, the shortage of talents and qualified employees in this sector is not a new situation nor a surprising problem, it is a simple continuous situation without any future solution.

According to this report, in April 2022 there were 33,000 open positions in need for urgent staffing. In comparison, in 2019, pre- Covid, the shortage of talents was already declared, with over 15,000 developers and engineers needed along with thousands of employees from different fields. Therefore, the math is simple and the conclusion is that the need to recruit more employees has more than doubled.

Another important issue that needs to be taken into consideration is the percentage of dismissed employees in comparison to the percentage of the resigned ones. During the second half of 2021, the percentage of dismissed employees was 2.6 % (the lowest one in the past decade) while the percentage of resigned employees was 10%. Judging by the forecast and the state of the market, this number will rapidly grow during the second half of 2022.

The real crisis is the recruitment one:

It’s plain to see, and not for the first time, that the real crisis is not the layoffs but the difficulty to recruit employees. This ongoing crisis will only get worse and so the need for an immediate solution is becoming more and more crucial.

Though there are several large and well-known companies that have laid off many employees, the current market situation cannot be addressed as unemployment. It’s important to understand that the recruitment talent pool is not overflowing with redundant talents waiting to be recruited. Thus, companies have to precisely plan their budget and recruit East European talents with lower costs and more relevant extent.

A quick look at the Tech HR market shows that East Europe offers a large quantity of Tech Talents that can easily fill the growing needs of the Israeli companies. Poland for example, offers more than 430,000 Engineers and IT workers waiting to be hired. Romania offers more than 600,000 workers and hundreds more workers are available for immediate work in countries such as Ukraine, Bulgaria, Slovakia and the Czech Republic.

Employing talents and experts from East Europe will allow the Israeli companies to provide the market with an immediate solution to their HR recruitment problem and at the same time to lower their expenses by circa 50%.

It seems that one of the most relevant solutions is outsourcing and out staffing from other countries, but the market is in need for a faster, more creative solution.

AllSTARSIT, an Israeli Software development company that specializes in outsourcing has recognized these needs and is offering a hybrid solution.

The company has recently established an international tech hub in Dubai, Emirates, where the Israeli talents work for an Israeli company while being positioned in the international tech hub in Dubai.

In this unique hub the Israeli talents can lead a multinational group of employees, enjoy the benefits and social living conditions that Dubai has to offer, and better economize their salary.  As a result, they can save up seed money.  While managing an international group the workers can also recruit more talents for East European countries therefore allowing the Israeli companies to significantly grow and expand.

Recruiting Israeli talents for the multinational tech hub in Dubai and simultaneously recruiting East European talents to fill in the relevant needed positions seems to be the fastest, profitable and worthwhile solution to the HR crisis the Israeli Hi Tech is facing these days.

About the Author
20+ years of leadership experience in Software Product Development and Product Market Launch. Leading and managing AllSTARSIT and its subsidiaries at the CEE Region,The Emirates, Colombia, and sales offices in Israel, United States. Working partnership with hundreds of clients ensuring successful delivery of multidisciplinary technological projects in various verticals, Conducting a high-scalable ALM, including Financial and HR management of hundreds of Engineers. Wide experience within global markets, providing business transformation for boosting profits ensuring sustainable growth.
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