Tepid Tech Job Market Still Has Hot Spots

Chip industry contracting, but mobile and Internet developers are still in demand.

The last quarter of 2012 was marked by wide-scale cutbacks and layoffs in the international computer chip industry.

The downtuirn included Freescale and Texas Instruments, both of which have a presence here, and Kiryat Gat's Micron Technology memory chip plant, where hundreds are expected to get dismissal notices shortly and the entire future of the facility remains uncertain.

On the other hand, software firms here, including a number of dynamic start-ups in the Internet and cellular software fields, continue to recruit new staff at a fast clip, and at handsome starting salaries.

The changes in the Israeli high-tech sector are reflected in hiring patterns and in the prevailing wages being offered.

A survey of the state of the high-tech industry in 2012 reveals that demand for research and development and start-up workers in the chip industry declined by 10%, according to Ethosia human resources firm, while salaries in the sector remained static.

On the other hand, demand for developers of mobile applications for the two major mobile phone operating systems, iOS and Android, grew over the course of the year by 25%. Salaries in that segment of the industry also grew - on average by 9%, which was the largest average wage increase in the high-tech sector.

Demand for Internet developers was up by 14% last year and their salaries rose on average by 6%, while demand for software developers rose by 12% amid average wage increases of 5%.

"The years 2010 and 2011 were very strong in the high-tech sector," said Ethosia CEO Eyal Solomon, noting that the years were marked by the recovery from the global economic crisis of 2008-9, but the rapid positive growth stopped in 2012.

Growth no longer double-digit

"We're seeing growth, but not double-digit. Instead it's more modest, resulting from the uncertainty over the year in the industry," he added, citing the crisis that the U.S. government faced over the so-called "fiscal cliff" as just one source of the lack of clarity.

"All year, we saw companies posting job openings and then putting them on hold or eliminating them," Solomon said. "This is a market with a lot of question marks."

Turning his attention to the computer chip industry, Solomon said the sector suffered a major blow last year when it came to demand for staff.

"It's a field that has become less worthwhile to invest in, as compared to investment in the mobile [content] sector. As a result, [investment] funds steered clear of the field and it began to contract. Currently there are only three or four new start-ups in the field. A major gap has developed between the mobile phone application field and the chip world."

He said the chip industry has become "dangerous" and expense-laden.

Demand for high-tech workers in engineering, operations and marketing positions, sales and media only showed minor growth last year compared to 2011.

The major increases have been in software development, development for the Internet and quality control. All told, salaries in the high-tech sector increased by just 3.6% last year on average, and Solomon noted that "salaries that don't go up are salaries that erode."

A breakdown of wage data for the past year by type of position also, for the most part, shows only small salary increases, if at all, other than in the mobile application and Internet fields, Solomon said.

The lackluster year in the high-tech field is also confirmed by data from the AllJobs website, where company officials report that the only type of jobs for which they have seen an increase in the high-tech sector is in information security, for which job listings were up by 8%, apparently due in part to an increase in cyber attacks on Israeli entities.

Employers' market

"You could say that an employers' market is developing, in which there are more job candidates than positions open, so the employers can be more choosy," said Raz Mitzna, AllJobs' VP for marketing and content. "The companies see an opportunity to upgrade their workforces. When there are more candidates for each position, the competition is great and jobseekers have to step up their job searches."

And when it comes to high-level executive placements, Ethosia said that last year saw a 12% decline at the level of CEO and vice president. "The chip industry is an entire field that is contracting, and there is no small number of senior executives - the extent is unclear - who are between jobs," Solomon said.

"This situation affects the entire industry. Another reason is consolidation among firms that were acquired or merged that preferred to combine business units. A situation has developed of an oversupply of CEOs and vice presidents."

Despite the sluggish situation overall, there have been other high-tech fields that have been newly considered as hot spots.

"The year 2011 was the year of cloud computing and information security and 2012 was the year of BI [business intelligence] and big data," said Orit Naor, CEO of CPSJOBS, a high-tech job placement firm. "Many companies got into the cloud computing field," she said, referring to data, software and computation service provided from a remote location.

"A lot of companies entered the cloud field because they thought it would be in demand because it was trendy, but the field spent itself and already has enough companies, staff and products."

The growth now, she said, is in new start-ups involved in mobile applications, the Internet, search engines, browser extensions and toolbars.

"For example, companies are developing applications to make search engines more user-friendly," Naor explained, adding that there is also a substantial increase in demand in the online marketing field.

Staff with expertise in search engine optimization, or SEO, are also in demand, she said, referring to the design of Web content so it gets prominent placement on search engines such as Google. Naor sees future growth in employment in the near term coming in large part from start-ups and local operations of multinational firms.

Looking ahead, Solomon remains fairly optimistic, saying 2013 should be similar to 2012, with growth in the sector, albeit limited in scope. The accepted wisdom in the industry seems to be that the pace of high-tech growth will be just 2% to 3%.

Ilan Assayag
Haaretz