Israel Plans Measures to Ease Way for More Foreign Tech Workers

Treasury official seeks to damp concerns that move will come at cost of local hiring

FILE PHOTO- An employee works at a laptop computer at the Jerusalem Venture Partners JVP Media Labs, situated in the JVP Media Quarter in Jerusalem, Israel, on Wednesday, Oct. 21 , 2015.
Bloomberg

Faced with a tight market for experienced high-tech workers, Israel is moving ahead with plans to make it easier for companies to bring in foreign professionals.

The 2019 Economic Arrangements Law, the supplementary legislation to the budget that the Finance Ministry is sending to the Knesset, will include provisions making it easier for companies to import workers so long as their salaries are double the national average, which today is about 10,500 shekels (about $3,000) a month for Israelis.

Meanwhile, the Population and Immigration Authority is planning to launch an improved website that will approve visa for foreign tech workers within six days of application, said a senior treasury officials, who spoke to TheMarker on condition of anonymity.

The visas will be valid for one year, up from the three-month term available now, with an option to extend them automatically for five years. The longer term aims to create a more stable market for foreign tech professionals in Israel, the official explained.

Nevertheless, he said, the program doesn’t aim to bring in massive numbers of foreigners.

“There’s no scenario in which thousands of workers will be coming to Israel,” he said. “The minute we import workers at a salary of 20,000 shekels [a month], we on the one hand show that we’re not planning a mass phenomenon. But at the same time we do hope to alleviate the pressure on salaries in Israel.”

The official said that rising pay in the high-tech sector, as well as a 10% gain in the value of the shekel against the dollar in the last year, had been making it harder for tech companies to compete in the global market.

“When a big local company wants to develop a new product, it could decide to recruit staff for a research and development center overseas, and we want to prevent that. We’d prefer companies to bring in a few talented workers for their local R&D center, with the aim of not just increasing its size but strengthening the Israeli ecosystem.”

Although Israel has developed a global reputation as Startup Nation and has attracted tens of billions in foreign investment for the high-tech industry, the technology share of the labor force has actually declined to less than 9%. By some measure, the industry is short 10,000 skilled professionals.

Vered Raviv Schwarz, chief operating officer of Fiverr, which lets people hire business service providers online, said the company was forced to develop a new product in the U.S. because of a shortage of local product managers. Still, Fiverr ended up flying Israeli staff to the U.S.

“If we bring in experts in the field, the entire local industry will develop. We need to decide whether we’re a Third World country or a high-tech center – if we say we’re like Silicon Valley, then let’s act like Silicon Valley,” she said.

Or Offer, CEO and founder of the digital market-intelligence company SimilarWeb, agreed. “The situation now doesn’t make sense – we need to be globally competitive. What the treasury and tax authority are doing is important. We need to reduce the obstacles to employing foreign workers,” he said. “Because of the political situation it’s hard to import workers and in addition to that, the government makes it hard.”

In the past two years, the government has in fact sought to ease the entry of foreign workers, including making it easier for spouses to enter the country and eliminating the requirement that applicants must have a college degree. Even so, the companies seeking to bring in a worker must hold multiple meetings with Interior Ministry staff in a long and bureaucratic process.

By setting a minimum wage for importers workers, Israel hopes to avoid a situation in which low-paid employees from less-developed countries like India are brought in large numbers to take less-skilled jobs at relatively low pay, as has happened in the United States under the H-1B visa program.

“If you look at Silicon Valley in the U.S., about 70% of those employed there aren’t American. But here there’s no reason any we shouldn’t enable hundreds of experts to come every year – that’s not something that should arouse concerns about the labor market,” said the treasury official.

Offer said he expected that bringing in foreign staff would actually increase demand for local hires. “Every worker I add to the company means I have to hire a few others around him,” he said. “It will increase the pie. The world’s global and competitive – we can’t continue to be a closed garden.”