High-tech’s new world order: Salaries falling, requirements rising, and nobody’s in a hurry to leave
High-tech’s new world order: Salaries falling, requirements rising, and nobody’s in a hurry to leave
The uncertainty, the layoffs, and the decrease in investments in high-tech have led to changes in the recruitment of employees. HR managers at companies that collectively employ thousands of workers in Israel tell Calcalist: This is how the recruitment processes have changed following the new reality
Global crisis, local crisis, layoffs, closing companies, mergers, spending money and a decrease in investments - it seems like an eternity has passed in Israeli high-tech since the beginning of 2022. Despite all these challenges, many of the companies continue to recruit new employees. In light of the situation in the market, we asked human resources managers at companies that are currently recruiting what has changed this year compared to the peak in recruitment the previous year. Has the power really returned to employers, and is it easier to recruit talent today? Recruiting employees for the high-tech industry in 2023 - a snapshot.
Salaries are going down - but not for everyone
In March 2022, something happened that we hadn't seen for a long time before in Israeli high-tech: the average salary went down. This was after reaching a peak of NIS 30,000 per month (approximately $8,600). Since then, the salary has managed to climb back up and in January of this year it stood at NIS 28,772 per month - a 5.4% increase compared to January of last year. But the average salary does not provide the full picture. In a period of crisis, of layoffs and a drop in real wages, the wage demands of specific employees in recruitment processes remained stable.
"At the macro level, we see a halt or a decrease in the level of conditions. But in the end a candidate who brings a unique set of abilities and talent and can arrive with several offers in hand, will not necessarily see a dramatic drop in conditions," says Danielle Rotem, Director of HR, HRBP & OD at Redis.
The salary requirements of the talents therefore have not changed. These are the workers who are usually not actively looking for work but are 'hunted' by employers. Therefore, it is possible to distinguish between the active job seekers and the candidates whom the employers approach on their own initiative. "Candidates who are actively looking for work today show more flexibility when asked about salary expectations. In addition, I recognize a trend of candidates who took advantage of the fertile market to improve their salary and today understand that they must adjust their salary expectations to the market trend," says Lee Shehebar, director of recruitment and human resources at the fintech company Nayax, which employs about 800 people worldwide, most of them in the development center and headquarters in the company's offices in Herzliya.
Although the waves of layoffs and decreases in the average salary were not immediately reflected in the reduction of salary requirements on the part of the candidates, human resources managers report that there is a certain flexibility on the part of the candidates in discussions about the terms of employment. "Salary requirements remain high, but we see that there is flexibility in candidates who understand that we offer other important values, such as stability for example," says Nirit Amar, Talent Acquisition VP at Ness.
Looking for stable ground
Stability, lack of dependence on investors, and employment horizons have become crucial considerations for candidates when choosing a workplace. When the market is characterized by uncertainty and the big companies are also laying off employees, candidates carefully check how safe the company they are interviewing for is.
"We come across questions that appear already at the stage of the initial telephone interview, such as: what are the company's business forecasts for the near future, is the position new, and how do we deal with the situation in the market. These questions point to the security that the candidates are looking for in the companies they are interviewing with," says Shehebar.
Candidates want to be employed in companies that do not depend on raising capital to survive, says Hilit Paz-Lachower, VP of Human Resources at Priority Software. "In 2021-2022, candidates had options in startups that raise capital in a value that sometimes increases from quarter to quarter. This year we see the advantage that a technology company with a long history and stability has. Growth, global activity combined with certainty and stability, play a significant component in our favor," she says.
Stability has become one of the most important factors for candidates, and this is expressed in the requirements and in-depth tests, and also in the fear of entering into new processes. "The questions and inquiries that candidates make are deeper and longer, and only after there is full certainty and confidence about the position, they will sign and make the move," says Amar.
Some of the candidates have personally experienced layoffs even if they were not fired themselves, therefore the companies choose to emphasize to potential employees the stability and growth of the company. In addition, candidates are still looking for personal and career development. "It can be considered ‘icing on the cake’ but it is something that candidates emphasize," says Rotem. "Companies that don't allocate the resources will end up losing the battle for talent."
Another demand from candidates that doesn't seem to be going away anytime soon is hybrid work. "Talents are not satisfied with little and insist on hybrid work and flexibility in working hours," says Aviya Telias, VP of Human Resources at Altshare, which employs 120 employees. Companies that do not allow hybrid work also encounter this demand and in view of the competition, which still exists, for talent, they are trying to be flexible. "The demand for hybrid work did not disappear after the pandemic was over. We encourage people to come to the company's offices and have a nice presence, but also allow for some flexibility according to needs," says Paz-Lachower.
A decrease in the number of open positions
The transition from rapid growth to an emphasis on profitability has led to the layoffs as well as the reduction in the number of open positions. Some companies that are still hiring today offer less than half of the jobs they offered at the peak of growth last year. "If you look at 2021, there were 30 open positions and today, because we are more responsible and choose positions that are critical to business, there are 12-15 open positions," says Rotem.
Merav Ben Ari, Global VP People at Eleos Health, explains that following the changes in the market, the company takes a careful and responsible approach to recruitment. According to Ben Ari, the companies open new jobs only if there is full confidence in their vitality. The same is true at Nayax, which has grown in the last two years and has not conducted layoffs recently. "We examine the need and importance of every new position that opens," says Shehebar.
Following the changes, most of the open positions are for roles at the core of the companies' technological development, such as engineering and programming. There are also jobs in sales and customer success, depending on the company's field of activity.
There are fewer jobs in the market and more supply of candidates, this leads to several trends in hiring. First of all, the professional requirements are increasing; second, the recruitment time is shortened; and finally, there are still positions that are difficult to recruit for.
Since there are many candidates the companies can afford to raise the standards., "It's a very competitive market, so when there is no supply, we hire people with less experience, and when the supply is better, we look for the most accurate candidates who better meet the job requirements," says Rotem. According to her, the hiring managers redefine and tighten the admission conditions, such as experience and academic studies.
Since there are many candidates, the companies can afford to raise the standards. "It's a very competitive market, so when there is no supply, we hire people with less experience, and when the supply is better, we look for the most accurate candidates who better meet the job requirements," says Rotem.
Shortened recruitment time
One of the changes that took place in the market this year and which the human resources directors pointed to is the shortening of recruitment times. Since there are more candidates for each position, who meet the job requirements, the companies manage to filter more candidates and shorten the time that passes from the moment a position opens until it is filled.
"The recruitment processes are shortened because each of the parties is much more focused on filling the position," says Ben Ari. Candidates don't linger when they know this is the place for them." On the other hand, due to the uncertainty in the market there are jobs that are actually more difficult to recruit for now.
"There is an illusion that because of what is happening in the market today it is easier to recruit, but in practice the experienced employees hold on to their jobs and therefore there is greater complexity in recruitment and specifically in headhunting," says Sefi Cnaani Behar, Talent Acquisition Manager at Applied Materials Israel, which employs 2,300 men and women in Israel. According to her, this also explains the fact that, as mentioned, the salary expectations of those employees have not changed substantially.
If in the past the difficulty in recruiting was due to a lack of candidates, today the difficulty is due to their fear of entering into new processes because they prefer to keep what they have - the existing workplace. The hiring managers tell of suspicion and hesitation on the part of the candidates, because of the market situation. Candidates are afraid to enter the processes and sometimes withdraw nominations even at advanced stages. The apprehension and caution on the part of the candidates lead to recruiters relying more on alternative recruitment methods such as 'word of mouth' and internal training.
"Candidates trust their friends who tell them about companies that are in excellent condition and that have an excellent horizon in the short and medium term. The employees recommend people who have worked with them in the past, schoolmates or members of social circles that they know are suitable for the nature of the organization. Everyone benefits," says Ben Ari.