Foreign companies frequently remark that the cost of employing Israeli engineers is close to that of American and European engineers. New figures published by the Israel Association of Electronics and Software Industries (IAESI) compare the salary costs of engineers around the world and found that the gap is narrowing.
IAESI found that an Israeli engineer costs $114,000 a year to employ compared with $130,000 for an American engineer and $145,000 for a British engineer. Israeli engineers are more expensive than their Spanish counterparts who cost $95,000 a year, while an Indian engineer costs $50,000 and a Chinese engineer costs $36,000 a year.
IAESI chairman Yehuda Zisapel said that the cost of an Israeli engineer has been influenced by the shekel dollar exchange rate, which makes an Israeli's salary more expensive when converted to dollars. The lack of engineers in Israel, he said, is also pushing up salaries.
He said, "There is strong demand for engineers in Israel in relation to the number of engineering graduates from colleges and universities.
According to the IAESI the number of engineering graduates is not rising. Israel has had 3,300 engineering graduates from universities annually for the past 15 years, and 4,500 graduates from colleges annually for the past eight years.
Zisapel said, "Israeli high tech has more than tripled in size over the past 15 years and that explains the difficulties. High tech must cope with the problem of salary costs of engineers while companies are transferring projects to India, China and Eastern Europe."
Most of the rise in R&D is being undertaken abroad - 80% outside of Israel and only 20% in the country. He said, "Amdocs has 8,000 employees outside of Israel and NDS has 1,600 employees overseas. Some of these jobs could be in Israel. This trend is strengthening with more jobs going abroad and less staying in the country."
He added, "At these salary levels it is not only the east which is competing with Israel but the US too. There are advantages to working in the US in the high tech sector because it is the place to be. The US has the largest number of engineers and the most advanced technology and science. It is the most advanced from the capital market point of view and it also is most advanced in the analysts sector. All the leading venture capital funds are in the US and huge companies such as Google, IBM and Microsoft. The competition from the east is tough and both India and China have large and developed high tech industries with hundreds of thousands of new engineers trained each year.
Published by Globes, Israel business news - www.globes-online.com - on January 18, 2011
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