Dr. Stéphane Meunier, a French-born chemist, lived serenely in Geneva, where he held a senior position in an aesthetic medicine company. But then, at a conference, he met Dr. Shimon Eckhouse, the prolific Israeli aesthetic medicine entrepreneur, who challenged him to set up a startup of his own. Meunier had to agree to just one small condition in order to obtain finance: to move to Israel, where Eckhouse's incubator is located. After obtaining his wife's consent to moving the family to the Middle East, Meunier came to Israel, and he is now the CEO of Hallura Ltd. in Yokne'am, which is developing the next generation of aesthetic medicine injections.
David Brocks from Germany completed a doctorate in computational biology at the DKFZ German Cancer Research Center, following which he came to do post-doctoral work at the Weizmann Institute. This was supposed to be a further stage on Brocks' path to an academic career, but during the Covid lockdowns in Israel he did some soul searching and decided to change direction and find work in industry. He joined Israeli unicorn Immunai, which is developing technology to expedite drug development, and he now works there as a senior computational biologist.
After finishing a second degree in electronic engineering in his native India, Girish Ajmera joined Applied Materials in Bangalore. In the course of his work, he travelled to meet many Applied Materials customers in Germany, South Korea, and Taiwan, and acquired a deep understanding of their needs. On the basis of this familiarity with customers' needs, Ajmera received an offer to relocate to Applied Materials' development center in Israel. He came to Israel with his wife, herself an Applied Materials employee, and their first child was born here, 18-month old Kanishk "who already speaks Hebrew better than we do," Ajmera admits.
High costs
Israel's technology industry suffers from a chronic shortage of thousands of professionals, and so in 2018 the Israel Innovation Authority opened up a fast track for bringing foreign experts specifically to Israeli tech companies and multinationals' development centers in Israel. Although the foreign tech experts track has no limit on numbers, the take-up is low. Companies are highly selective in bringing to Israel people with rare, special experience, and not developers and engineers to fill out the ranks. According to the Population and Immigration Authority, 2019 was a peak year for demand for foreign technology experts, with 423 applications filed by technology companies to bring such experts to Israel, up from 174 applications in 2018. In the next couple of years, however, because of the Covid-19 pandemic, the numbers fell back to just 113 applications in 2020 and 122 in 2021.
The reasons for these sparse numbers range from the high cost of bringing experts to Israel to the restrictions that the state imposes and the difficulty of leading one's life in Israel without a national identity number, the lack of which means that these people cannot carry out simple transaction such as transferring ownership of a car, or even filling up at a self-service pump at a fuel station (more details on that later).
Adv. Roi Hayun of Herzog Fox & Neeman, who for years has represented technology companies seeking to bring in foreign experts, attributes the low number of applications to the cost being too high. "A high-tech company that wants to bring in a foreign expert has to pay NIS 11,400 annually in fees. In addition, it has to pay the foreign expert a monthly salary of at least NIS 21,000, to finance his health insurance at a cost of NIS 10 a day, and also to provide accommodation, a vehicle, meal vouchers, pension contributions and contributions to an advanced training find. The cost comes to NIS 40,000-50,000 per employee. Instead, the company can employ the same person in Eastern Europe, pay him $1,500-2,000 a month, and obtain the same output remotely. It doesn't pay to bring a rank and file developer to Israel," he says.
Restrictions that deter talent
Despite the relaxations in awarding work permits to foreign experts introduced over the years, the permit contains one very significant restriction. While other countries promise citizenship, or at least residency, to technology talents after a time, a foreign expert who comes to Israel is limited to a five-year stay. In the past, this was a strict limit and exceptions were not allowed. Today, a special application can be filed to extend the stay by a year or two years beyond the set time. This still creates a substantial problem for experts such as Meunier, who recently renewed his work permit for a fifth year.
"As an entrepreneur, you build something from zero. Today we are already 12 people at the company, and after we receive the regulatory approvals we'll build a production facility in Yokne'am and we'll have 40 employees. It's a little paradoxical that they're asking me to leave Israel, when at the same time we're receiving grants from the Innovation Authority so that the company will stay and grow in Israel," Meunier says.
"The five-year limit came about after there were foreign experts who lived here for many years and in the end applied for citizenship, but there's still a need for flexibility. If you have a talented person who has founded a company here, then he's making a significant contribution to the economy, and he should be given stability and certainty over time," says Hayun.
"Living in Israel without an ID card is complicated"
Moving to Israel, like any relocation to another country, requires cultural adjustments. Ajmera says he was initially surprised by Israeli workplace informality. "In India, there is more of a hierarchy and you usually do not just get up and go talk to your manager directly. Here in Israel, it is easier to do that," he says. "In Israel, everyone also calls each other by their first name, and in India this is not always the case."
Brocks, for his part, says that at the beginning of his career in Israel, he had to learn to adopt some Israeli assertiveness. "In Germany, we are used to following exactly the law and regulations, but in Israel it is not always like that. I remember coming to open a bank account in Rehovot and none of the clerks wanted to take care of me because it was a complicated process. I saw people passing me in line and I kept waiting. Later on, I understood that I needed to be more Israeli and insist on what I want, "he says.
But while cultural differences are easy to get used to, it is harder to adjust to Israel’s bureaucratic constraints. Although these foreign experts have lived in Israel for years, the fact that they are not residents with an Israeli ID number makes it difficult for them to carry out fairly basic processes. "An ID number is my nightmare," Brocks laughs. "Without an ID number you cannot pay electricity bills online, for example, so I ask my landlord to pay them for me. You also can not always refuel at gas stations. Because the German passport contains both numbers and letters, it generally complicates matters even more because many systems do not support letters. "
"I still have to physically go to the bank branch to pay most bills. Luckily there is an automatic payment machine there and I don’t have to wait in line," says Meunier. "In addition, during the coronavirus period there were specific concessions given to Israelis, such as that they were not required to do a PCR test upon leaving the country. But I, as the holder of work permit, was still required to perform the test upon departure.
"Many Israeli high-tech people travel to work abroad and I think that Israel, because of its entrepreneurial ecosystem, can attract many foreign experts to set up companies here," Meunier adds, "But they must show more flexibility. The problem is that the work permit here is time-limited and it is complicated to live in Israel without an identity card."
Towards the end of our conversation, Brocks tells me he intends to move to New York in the coming months, where Immunai’s headquarters are located. "After four and a half years of studying and working in Israel, I felt it was time to move on. I shared this with the company, and luckily they were supportive, and offered me the move to New York," he explains. "On a professional level, it will give me the opportunity to be near the laboratories and experiments being done in New York, and on a personal level, in New York everyone is a foreigner, so it's easier to get by, and of course it will also be more comfortable in terms of the language."
A new track in the wake of the Ukraine war
Although the use of foreign expert work permits has been limited to date, market sources estimate that the Russia-Ukraine war will induce Israeli companies and multinational development centers in Israel to request more permits, so as to bring in workers from both countries, and 2022 is forecast to set a new record for foreign experts. In addition, Jews from Ukraine and Russia often prefer to come to Israel as a foreign expert, instead of going through the far longer process of recognition under the Law of Return.
In the wake of the war, the Israel Innovation Authority and the Population and Immigration Authority launched a special channel for obtaining work permits for foreign technology experts from Ukraine. The difference is that companies bringing Ukrainian workers into Israel will not have to guarantee salaries of twice the average wage. At present, however, channel provides 90 day permits only, not one-year permits. Innovation Authority CEO Dror Bin emphasizes that there is no intention to completely cancel the double salary requirement for foreign experts. "We don’t want to flood the market with inexpensive programmers, but to bring people with great added value to Israel," he says.
A marketing issue?
Bin’s view is that lack of awareness on the part of high-tech companies is the reason that so few have made use of foreign experts. "This track has never been marketed to the industry and there’s no awareness of it. When I ask people in the industry, they all say they didn’t know the foreign expert track existed. We’re planning marketing activities for this and other tracks that will bring those eligible under the Law of Return here, and I believe that the numbers will increase."
In the end, however, Bin admits that foreign experts will not solve the high-tech worker shortage. "This is a sensitive issue because, on the one hand, Israeli high-tech competes in the global market, and therefore we need to support the introduction of more talent into the country. On the other hand, we are the Jewish state. Therefore, most of our efforts are aimed at bringing in those high-tech workers eligible under the Law of Return."
The law that has CEOs bunking with roommates
According to the Innovation Authority, there were 13,000 vacancies in the high-tech industry at the end of 2020. According to data from placement company Ethosia, the shortage has worsened since then, and in 2021, the Israeli high-tech sector was short 18,710 workers.
The legal framework that allows the import of foreign workers, like Meunier, Brocks and Ajmera, to Israeli high-tech companies or to multinational development centers in Israel, has existed for many years. The Foreign Workers Law was passed in 1991 and a decade later, in 2001, the category of foreign expert was defined for the first time, making it possible to bring workers to Israel with high levels of expertise; special skills not found in Israel. A foreign expert was initially defined as someone earning more than double the average wage in the economy and whose presence would create at least ten new jobs in Israel. The condition requiring employers to pay twice the average wage to a foreign expert exists to this day, but the job creation requirement has been eliminated.
Does the fast track work?
In 2018, the Population and Immigration Authority announced a special track for bringing in foreign experts that was specific to Israeli high-tech companies and multinational development centers in Israel. Within this framework, high-tech companies benefitted from fast processing of requests to bring in experts that could be submitted online. Another precedent set by this special track was that it also allowed the spouses accompanying foreign experts to work in Israel.
Because Israel has never enacted a law specific to foreign experts, the same law for bringing in a construction worker or a caregiver applies to a senior engineer and even a start-up CEO. This sometimes gives rise to laughable absurdities. For example, the law requires the employer to provide foreign worker, including a foreign expert, with accommodation for up to four roommates - something that probably no technology worker would ever agree to.
Published by Globes, Israel business news - en.globes.co.il - on May 1, 2022.
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