A shortage of high-tech manpower could prove a major stumbling block for Israeli economic growth if the problem isn't addressed soon, according to a report by a team led by Prof. Eugene Kandel, chairman of the National Economic Council.

This came as no surprise to Israel's high-tech industry. Groups representing the high-tech, electronics and software industries have been complaining for years about a dire shortage of engineers. They cite a lack of 8,000 to 10,000 qualified personnel.

Elisha Yanay, chairman of the Israel Association of Electronics & Software Industries, notes the growing demand for high-tech workers as the number of university science graduates remains flat. This can only increase the gap between manpower and jobs. He says the shortage of qualified people in high tech is forecast to reach 20,000 in five years.

The report by Kandel's team states that a decline in the number of technology students, due to a drop in the level of high school science and technology courses, is a contributing factor.

Such statements are sure to infuriate engineers who have lost their jobs and are having a hard time getting back into the industry - many 45 or over. To make sense of the disparity between these people's experiences and the needs of industry leaders, TheMarker formed a panel of five recruiting and development managers from high-tech firms - ranging from start-ups to large international companies.

All said they couldn't find enough suitable employees. The Kandel team's conclusion - that the worst shortage is in outstanding university graduates in hardware and software with work experience - could be the root of the problem. The labor market thirsts for engineers, but it only wants the best.

"We would like to recruit 20 additional staff this year, but chances are we won't succeed because we can't find the very best," says Amir Rapson, vice president of research and development at WatchDox and responsible for the company's recruitment of engineers.

Rapson's words are echoed by the other panelists: Joel Norton, human resources manager at Hewlett-Packard Israel; Shelly Meyer, VP human resources at Wix.com; Eldan Ben-Haim, VP research and development at Trusteer; and Yaniv Shaya, senior VP engineering at Imperva.

Managers insist they offer competitive pay - average or above. "We do a great deal of interviewing, but hiring is sparse. Only in 20 passes the tests. This isn't necessarily due to a lack of relevant experience: What's often missing is the right approach to technology," says Rapson.

"I prefer a programmer telling me he doesn't care what technology we use to one who comes with a pat set of tools. And there are fields where it's harder to find candidates, like user interface programming."

Rapson is blunt about the company's difficulty finding the right people. "In a company the size of WatchDox, everyone has an impact," he says. "It's important for us to recruit exceptional people that have shown some sign of excellence - whether during their military service, studies or work."

Rapson gives some examples. "Serving in Unit 8200 is certainly a strong indication," he says, referring to the elite intelligence unit in the Israel Defense Forces.

"It means the candidate was screened by an organization with more resources and experience to invest in the screening process. Naval officers' training is another indication of excellence, as well as being captain of a basketball team."

However they put it, the panelists demand excellence. "There is more room for stronger people and less room for those playing a subordinate role," says Ben-Haim.

Shaya says Imperva, which was floated last year and is now trading at $867 million, doesn't yet feel forced to lower the quality threshold. "When we reach the stage of making the candidate an offer, 80% of the time they accept," he says. "But it's hard finding someone who makes it through the entire hiring process."

But at Hewlett-Packard, which Norton says hires hundreds of people a year in Israel, the problem isn't a lack of versatility but suitability for specific jobs. "Requirements vary from job to job, so the hiring process varies, too. Technical managers are much more involved in recruiting for certain positions, while human resources play a greater role for others," he says.

"There's a huge gap between the particular requirements for each job and what's available out there. So for instance, when faced with a shortage of mechanical engineers experienced in certain areas of our work, we launched an internal training program for young engineers."

A special training program was also implemented at Wix, one of Israel's largest home-grown Internet companies. Wix develops platforms for formatting websites and needs lots of designers.

"For the past two years we've conducted a training program for taking on new designers," says Meyer. "Each class, with 30 participants who get paid, lasts about three months." Many of them get hired by the company.

A laundry list of a CV

While big companies like Hewlett-Packard with large HR staffs do most of their recruiting through placement agencies and candidate searches, small and mid-size companies are biased toward personal connections. Thus there's a high degree of homogeneity at these firms, particularly the many employees who served together in the IDF's various computer units.

Over half the employees at WatchDox served in the army as programmers, says Rapson. Of the 200 or so people working for Imperva in Israel, about 60% arrived thanks to connections.

"All told, when sifting through mountains of CVs, the tendency is to use heuristic methods that leave much to be desired," says Shaya. "With the friends-bringing-friends approach, you also reach people who may lack what it takes on their CVs but turn out to be superb employees."

Shaya adds that in high tech, screening candidates based on their CVs is often frustrating. "We encounter masses of CVs that are nothing more than laundry lists of technologies and programming languages the candidate knows. They all look the same. What I want to know is the candidate's impact on companies he previously worked for," he says.

"It isn't until the interview that it turns out he not only knows the technologies but actually developed the entire mobile infrastructure at the company he last worked for, or led the company's effort for examining code. Suddenly the person behind the CV is revealed. If these accomplishments appeared in the CV itself, it would be a big help in the initial screening."

To cope with their recruiting woes, companies seek assistance from their current workforce. One way is to use profiles on social media websites. Imperva, for example, uses Jobvite recruiting software, which uses profiles on social networks like LinkedIn to publicize job openings.

"LinkedIn is certainly starting to become more dominant in the recruiting process, and we've already hired people located through the network thanks to the skill sets they disclosed," says Shaya.

But the panelists agree that using social networks is a double-edged sword. The networks can reveal companies' organizational structures and expose their own workers to competing offers.

Some panelists say they've suffered aggressive recruiting such as a mass appeal to company employees via their LinkedIn profiles. "It's gotten to the point that an employee not approached by a marauding company is insulted on discovering that all his co-workers have been contacted," says one panelist.

Israel's high-tech industry consists of huge international firms, large Israeli companies and many start-ups. High-tech workers often move between these three types of companies during their careers. Many of the larger companies employ people of various ages and needs for flexibility between the job and raising a family.

It has been claimed that having relatively few large Israeli companies is partly to blame for people over 45 having trouble finding work - particularly those who haven't advanced to managerial positions.

Norton notes that about 25% of HP employees in Israel are 45 and up, not just those in management. "There are many people in this age group working in sales or support who still have their careers ahead of them. We look at ability, not age. Some jobs, however, especially those demanding familiarity with new technologies, lean toward youth - numerically at least," he says.

"There are technological positions, as for senior architects, where chances of filling them with someone young are low," says Shaya, who adds that around 15% of Imperva employees are over 40. But he and the other panelists say few older people apply for work, or that their CVs appear unsuitable.

"This could result from conflicting expectations," he says. "If someone who served in more senior positions is also interested in a job considered to be lower in rank, it's important to specify this on the CV."

Despite the image of start-ups being suited to young people willing to devote days and nights to their work - as opposed to larger, more established and conservative organizations more suited to people with families - there's a two-way flow between these types of companies. And it's not necessarily associated with a particular age group.

Rapson says the problem is with people whose talents are wasted at small companies employing one or two developers on an application that probably won't get off the ground or manage to raise capital in the next funding rounds.

"When the book 'Start-Up Nation' came out, it became very cool to establish a start-up," says Rapson. "There are many people wasting their talents in areas that aren't actually technology-related after receiving funding from angel investors."

The transfer from small, younger companies to larger, older ones isn't a set path based on age. "We have many people coming from large companies and many who have said they would begin a start-up the following year - some who did and some who didn't," says Meyer. Start-ups sometimes give preference to people with experience at large companies who became familiar with organizational and managerial culture.

"We look for people from large companies, particularly at the managerial level," adds Shaya. "I myself came from HP." Norton says, on the other hand, that large international companies, known for their corporate group-think, need people from the start-up culture who take risks and encourage creativity and innovation.

Attracting women into high tech

The recruitment managers agree that one way to improve Israeli high-tech and the worker supply is to integrate population groups underrepresented in the industry. The most notable group lacking is women, even though they come from the same education system as the engineers and developers at start-ups, international companies and the army's elite technology units.

Still, the panelists agree that the supply here is short: Few women choose scientific studies as far back as high school. "I'm always surprised that high tech and technology don't attract more women," says Norton.

One way companies can draw women is by allowing flexible hours for a better balance between work and family life. "As soon as technology supports the ability to work from anywhere, we allow almost everything," says Norton. "Anyone who wants to work evenings, for instance, will work evenings."