The main barrier to growth in Israel’s high-tech industry, and thus the country’s ability to compete internationally, is the shortage of computer engineers. But a government study reveals the great unrealized potential among computer science graduates from Israeli universities and colleges who don’t find jobs in the field.
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It appears where they went to school is a key factor in their employment outlook. Fully 36% of graduates with bachelor’s degrees in computer science and 39% with degrees in electrical engineering end up outside high-tech, the researchers say.
The study is the work of Yael Mazuz Harpaz of the Labor, Social Affairs and Social Services Ministry and Zeev Krill of the chief economist’s office at the Finance Ministry.
The disparities in the employment picture doesn’t simply reflect a disparity based on where one went to school. There are also divergences among the universities themselves, the study found.
Nearly 80% of graduates with relevant degrees from Israel’s most prestigious universities find employment in high-tech, compared with 71% for graduates of universities that the researchers deemed “less selective.” Among graduates of government-funded colleges, the figure was 62%, while for graduates of private colleges it was 65%.
Mazuz Harpaz and Krill did not give the names of the institutions of higher learning they used. However, they ranked the institutions based on average scores on Israel’s psychometric exam, the standardized test used in deciding whom to admit to the country’s universities and colleges.
The situation is similar when it comes to high-tech employees’ salaries. Graduates of programs from the selective universities earned more than graduates from any other university or college. On the other hand, there was no significant salary gap between graduates of the other universities and graduates of private colleges.
High-tech exports falling
Looking at the bigger picture, high-tech employment in Israel has not risen in a decade, and high-tech exports have actually begun to decline. But Israeli startups continue to raise huge sums from foreign investors and generate major demand for skilled employees. That in turn pushes up salaries in the industry, which are rising faster than in most other sectors of the economy.
Also, even though the salaries of high-tech graduates from public colleges may be lower than that of graduates from universities and private colleges, these people still generally earn more than university graduates in fields such as accounting, economics and law.
The issue of disparities among graduates of various institutions of higher learning, particularly between college and university graduates, is complicated, prompting questions over whether the going is easier at less-selective schools or whether the prestigious universities’ reputation also comes into play in hiring and compensation.
It also raises questions about whether an institution’s admissions criteria are a good predictor of the professional success of the school’s graduates. The researchers don’t have a definitive answer, but they say the disparities regarding a graduate’s eventual employment in high-tech persist even when college and university graduates with similar backgrounds and abilities are compared.
TheMarker reported in May that large companies and multinational development centers prefer unitversity graduates. According to an analysis at the time carried out jointly with the startup Workey, companies such as Microsoft, Intel and Tabula, the rate of university graduates recruited over the preceding five years had been between 83% and 86%. At Google and Amazon in Israel, 94% of developers who earned a bachelor’s degree did so at a university rather than a college, even though in recent years the colleges have been turning out a similar number of graduates.
Representatives of the colleges have told TheMarker that it’s unfair to lump all their institutions together when trying to draw conclusions. Many colleges say their graduate placement rates top 90%, although Mazuz Harpaz and Krill found that placement rates among college graduates did not exceed 70%.
Of course, one way to address staff shortages in high-tech is to expand the number of people studying subjects relevant to the field. Over the past eight years, the number of graduates has significantly increased in computer science, electrical engineering, math and statistics, after hitting a low in 2008. But the growth has been almost exclusively at the colleges, not the universities, again raising the issue of the success of these graduates to land a job.
Mazuz Harpaz also adds a cautionary note to her study’s conclusions. “We need to remember that there is also high demand for workers with technological training beyond the high-tech industry,” she says.
“Currently, every company and government institution needs developers, cybersecurity staff and others, so it’s very reasonable that not all graduates with degrees will be absorbed in the [high-tech] industry. In addition, there are students who continue on for advanced degrees and are not included as people who find jobs in the industry.”