College Grads No Good for High-tech, Need University Degrees, Says Industry Leader

From searching Facebook to retraining seniors to wooing Haredim, Israeli high-tech is getting creative in the scrabble for skilled staff.

For Kuti, an entry-level hardware engineer at a small high-tech company on the outskirts of Haifa, high school was rough. He struggled in math, physics and most other subjects and opted to spend most of his time outside, playing sports or hanging out at the beach.

Yet in the last year of high school, Kuti was chosen to participate in "From Three to Five," a project initiated ten years before by a group of graduates from the prestigious Technion – Israel Institute of Technology.

Two thousand high school students from Israel's peripheral towns were chosen. The project goal: to provide the local high-tech industry with a talent pool for shaping into high-quality professionals. Some of the chosen ones were struggling students.

"About 40 of us with learning difficulties were chosen for training, to improve in math, physics and English," says Kuti. "Within six months I was getting grades of 80 percent and 100 percent in class. After the program, I studied computer science at Tel Aviv University, and the rest is history."

Why would the high-tech industry go to the trouble of recruiting problem pupils? One reason is simply that it's starved for talent. "Based on industry estimates, the sector needs somewhere between 8,000 and 10,000 hardware and software engineers, and the number is growing by the year," says Elisha Yanay, chairman of the Israel Association of Electronics and Information Technology Industries. "In the next five years, the shortfall will reach 20,000."

From combat to computers

Five years ago the same group launched a second project, "High-Tech Horizons," for discharged soldiers. Some 250 ex-soldiers enrolled in a 14-month pre-academic program where they strengthened their command of subjects including math, physics and English. After the program, they went on to take the university entrance exams.

In Israel, universities are research-oriented, while institutions referred to as colleges are more vocational - oriented toward technical skills.

Of the program graduates, around half was admitted to universities, while the other half was admitted to colleges, the first step toward pursuing a career in high-tech.

The high-tech industry in Israel is booming and desperately seeking qualified employees. Both projects are part of a series of initiatives to fill its ranks.

The number of students enrolled in the exact sciences rose from 1996 to 2005, says Yanay, when it reached 8,000 a year. Since then, however, despite the massive demand in the industry, the number has held steady, creating a growing gap between supply and demand.

Moreover, the Israeli technology sector did well by the massive influx of immigrants from the former Soviet Union in the early to mid-1990s. "The Association for Engineers realized there was a wealth of civil, military and agricultural engineers among immigrants from the former Soviet Union. So with the help of then-Labor Minister Eli Yishai, it gave accreditation to approximately 20,000 of them," says Yanay. "But these people were already in their 40s and won't be working forever. When they leave the industry, the shortage will get even more severe."

What to do? How about tapping new pools?

Zisapel: College grads don't make the grade

Yanay points to two not-yet-utilized sources of talent: Israel's ultra-Orthodox and the Arab communities. "These are the most significantly untapped manpower reserve," he says. "With all due respect to the various volunteer projects, it is the government's responsibility to involve the ultra-Orthodox and the Arabs the way we once did Russian immigrants. That is, to train them to work in high-tech."

It is also crucial that allocate more money to schools such as the Technion, Tel Aviv University and the Ben-Gurion Institute of the Negev, Yanay says, so that they, in turn, can up their enrollment numbers. He recommends that schools look to recruit an additional 1,000 students in the exact sciences once they have the funds to handle them.

"If we want to preserve Israel's standing in the high-tech industry, we need to beef up industry exports, which today stands at $25 billion per year. This can only happen when we implement a decisive plan for recruiting new workers into the field."

Yehuda Zisapel, the founder and chairman of Rad-Bynet, an Israeli life science start-up, oversaw the "From Three to Five" program. He says that the high-tech shortage has reached all corners of the industry, first and foremost in the field of communications and computers for the military and lastly in biotechnology.

Rad-Bynet has 4,000 workers but could use 300-400 more software engineers, Zisapel says.

"We offer very attractive salaries of around NIS 23,000 ($6,000) a month," Zisapel says. "But we're still having trouble recruiting. And it's not just us. Scientists and engineers are the heart of high-tech. They're the ones who create the added value, and they're the ones who attract investments for their companies.

"Our industry is like a spiral. The more qualified engineers and scientist we can absorb, the more the companies grow at a faster pace and the more the investment capital they can raise and the size of the potential venture capital increases. And after all that growth, once again, there is another worker shortage."

Zisapel argues something that will likely irk more than few. Of the 8,000 graduates in the fields of computer science, medicine, mathematics, physics, chemistry, biology and engineering each year, fewer than half are really qualified to meet the demands of the trade. Only students who graduate from universities – not colleges – with degrees in the exact sciences are truly desirable for companies like Intel Israel, Check Point System Software, ECI Telecom and Rad-Bynet, and it is exactly these types of students that they are lacking, he argues.

"With just 3,300 university students graduating the exact sciences a year, it isn't really isn't possible to establish a flourishing high-tech industry," he says.

For the short term, Zisapel says, the industry should reinvest in its senior workers. He recommends a six- to nine-month training program specifically for people between 50 and 60 years old, designed to help them re-enter the high-tech workforce.

"We are talking about serious and devoted workers who can return to the workforce and become successful development engineers," he says.

Neglected human capital

In the long term, he says, the Israeli educational system has to be changed.

"Israeli schools don't train pupils to do high level math and physics," Zisapel says. "We have to start at elementary school level, or even in kindergarten. Human capital in Israel is simply neglected."

Nirit Cohen is deputy director of Human Resources at the computer chip giant Intel Israel, which employs 8,000 workers. Every year, the company seeks out 400 engineers, 200 practical engineers, and 800 more students of engineering, electrical engineering, electronics, and computer science.

The most desirable employees, she says, are those with degrees in computer science, software engineering and electronics.

"Like every other high-tech company, we are constantly finding ourselves in new fields," she says. "We really need analogue and validation engineers, but they're extremely hard to find."

The most sought-after practical engineers are ones with experience in computing and control systems, electricity, electronics and even air conditioning. Intel is getting creative in its hunt for qualified workers, even searching via social media. The company has also reached out to Israeli consulates abroad, as well as the American Joint Distribution Committee, to find potential Jewish engineers and scientists in the U.S. and Western Europe.

It has especially ramped up its efforts in the Arab sector, taking out ads across Arab media.

"The pay is high, the conditions are good, and we offer job security," says Cohen. "I don't recall there ever being layoffs or pay cuts, even in the worst times. But despite all that, we are seriously feeling this shortage."