Opinion
Israel’s talent drain comes at a heavy price — it’s time to rethink global strategy
“Technology alone won’t solve the problem. Belonging, culture, and human connection must now transcend geography,” writes Rinat Buchholz, Founder and CEO of Global Teams, as the high-tech industry grapples with employee retention and global workforce management solutions.
Employee retention is no longer just a high-tech challenge — it’s a national economic threat. As skilled professionals leave their positions at growing rates, the ripple effect extends far beyond individual companies, impacting entire industries and economies. In small markets like Israel, the impact is even sharper and ignoring it will come at a high cost.
According to McKinsey’s 2024 report, about 40% of technology-role employees are considering quitting within a year. Meanwhile, local salary costs have soared, widening the gap between companies that can afford top talent and those that cannot. The shortage is felt even more acutely in Israel’s relatively compact tech ecosystem. The result? An urgent search for global solutions.
One major response has been the creation of offshore tech teams. According to recent data from the Israel Innovation Authority, the number of Israeli companies employing permanent staff in Eastern Europe — mainly Poland, Georgia, Romania, and Bulgaria — has risen by 37% since 2020. Beyond cost savings, these regions offer an unexpected cultural alignment with Israeli business values: speed, independent thinking, and entrepreneurial drive.
But outsourcing isn’t a silver bullet. If companies treat offshore employees merely as cheap labor, loyalty vanishes. Building remote teams demands a new mindset: How do you cultivate commitment among employees who have never stepped into your office? How do you foster belonging without casual hallway chats or a shared company culture?
Leading economies are already adapting. The US has launched government-backed initiatives to strengthen distributed team cultures. The EU is investing in training programs for managing remote workforces. Israel, by contrast, is lagging behind.
Global hiring isn’t a replacement for local talent — it’s a necessary adaptation to a changed world. Instead of resisting the trend, Israel must embrace it, while ensuring labor rights, encouraging the export of tech services, and providing tools to help companies build global organizational strength.
The need became undeniable after October 7th, when many Israeli companies suddenly had to rely on their international teams. Employees were drafted into military service, parents stayed home with children, and global teams kept operations alive. The lesson was clear: A resilient economy requires a robust global infrastructure.
Instead of asking, "Where do we find the next local talent?" Israel should be asking, "How do we retain and empower talent — wherever it is in the world?"
Public policy must evolve to meet this reality. Israel needs investments in employee retention strategies, training for hybrid management, and incentives for companies that successfully create global belonging. Mechanisms should be introduced to track global attrition rates and measure organizational connectivity, even among employees outside Israel’s borders.
Emerging trends — like cultural liaison roles and Retention Managers — are starting to seep into Israeli business practices, but without systematic support, progress will be slow. If Israel fails to adapt, it risks losing not just top individuals, but its entire competitive edge.
Technology alone won’t solve the problem. Belonging, culture, and human connection must now transcend geography. Israel’s future economic resilience depends on embracing this new reality — and acting before it’s too late.
Rinat Buchholz is the Founder and CEO of Global Teams.
