Most High-tech Companies Plan to Hire People This Year

Israel's high-tech industry is turning cautiously upbeat as 2010 gets underway. By and large, the companies expect to hire more than they fire, to raise fresh cash from investors and to raise salaries while going about it. Bonuses may stage a comeback, too, according to a survey of 250 high-tech companies employing about 100,000 people in Israel.

More than half the respondents (57%) are purely Israeli companies operating in Israel, while another 42% are local branches of multinational corporations. Two companies not included in either category belong to the Israeli government.

While in the second half of 2008, a big majority - 80% of the respondents - reported layoffs, only 16% believe they'll be cutting back staff this year. Of the 16%, most are small or medium-sized companies, and they anticipate firing 3.5% of their workforces, on average.

Just as important, some 75% of the companies said they intend to hire new people in the first half of this year, adding about 2,000 jobs altogether. In fact, despite the stagnation that gripped the labor market in general last year, 92% of the high-tech companies that participated in the survey said they'd hired people in the second half-year of 2009. Altogether they hired 3,500 people.

However, Moshe Zviran of Tel Aviv University, who carried out the survey, says the companies were in general not hiring last year in order to grow. Only 15% of the companies said they'd hired people in order to grow. The rest were either manning vacated positions, or were taking advantage of the situation to improve the quality of their workforce - replacing "inferior" workers with better ones.

Wage cuts had been all the rage in the last two years: Nearly 40% of the companies said they had cut salaries in the second half of 2008 and in almost all cases, the wage cuts remain in force to this day. The good news is that fully half the surveyed companies have budgeted salary increases this year. Most (61%) promise to raise salaries across the board for all workers, but a quarter of the companies say their raises will be selective.

About 13% haven't decided yet, whether to raise salaries for all or only some of the workers.

Also, most of the companies banished the bonus in 2009, but a quarter didn't, and handed out bonuses to all workers. The bonus averaged 1.3 monthly salaries in value.