RISE Israel (formerly SPNI) has published a comprehensive study of layoffs in Israel’s technology industry, focusing on the period between March 2022 and May 2023.
The study uses data from over 30,000 workers gathered from LinkedIn. The main findings indicate a number of trends:
- The technological workers at technology companies are at the lowest risk of being laid off.
- Workers with the longest tenure are also at low risk of being laid off.
- Men are at greater risk of being laid off than women.
- Workers without higher education are at higher risk of being laid off.
- Among workers with higher education, the type of degree and the place of study, whether a university or a college, do not affect the chances of being laid off.
College graduates find work faster than university graduates
The key questions that the study sought to answer are: What factors affect the risk of workers losing their jobs? How long does it take for laid-off workers to find new jobs? Where do laid-off workers manage to find new jobs?
On the time taken to find a new job, the study finds that half of those laid off found work within three months; 27% found work in the same calendar month in which they were laid off or the following month. The sample consisted of 6.009 people who had been laid off. The youngest workers (measured as those within two years of having earned their bachelor’s degree) took the longest to find work - about twice as long as older workers.
According to the study’s findings, the median time taken to find a new job for workers who are two years or less out from completing their first degree is almost eight months. By contrast, for workers who completed a first degree two to five years previously, the median time taken to find a new job is only 3.8 months. According to the data, there is little difference in this respect for workers with over five years experience.
Technology workers find new employment the fastest, with a median time between jobs of 3.4 months. People with first degrees find work faster than those with second degrees or above, and also faster than workers with no degree at all. An interesting statistic that emerges from the study is that graduates of colleges find work faster than graduates of universities, and also faster than those with no higher education.
Nevertheless, as the study points out in discussing its limitations, the data from LinkedIn do not distinguish between the unemployed seeking work and those who have left the labor market temporarily, to study or travel, or even permanently. Another limitation is that some people may not have updated their profiles, which would lead to overestimation of the time spent unemployed.
Gender gaps
According to the study data, of the workers in the companies examined, 63% are male, which is representative of the technology industry in general. The proportion of men laid off was found to be 17.2%, slightly higher than the proportion among women, which was 15.9%.
That could be seen as surprising, since men are more highly represented in technological roles and in the older and longer tenure groups, three characteristics that tend to reduce the risk of being laid off. Despite this, the study finds a tendency at companies to dismiss fewer women. All else being equal, a man is 4-9% more likely to be laid off than a woman.
Layoffs more common at international companies
According to the study, 7.6% of the technology companies active in Israel (390 out of 5,100) are development and production centers of multi-national companies. These centers employ 24% of Israel’s technology workers. As far as the incidence of layoffs is concerned, of 168 downsizing events identified, 10.7% occurred at multi-national companies. That is to say, layoffs were more common at multi-national companies, but they tended to take place at relatively small companies, and the numbers of those laid off were also relatively small.
The study also found that, of employees laid off by multi-national companies, 26% found work at another multi-national. Those leaving local companies show a clear tendency to stay at local companies, with only 14% of them moving to multi-nationals.
According to the study, the wave of layoffs in Israel’s technology industry created a movement of people from large companies to small ones. 45% of those laid off moved to a smaller company than their previous one, while only 21% moved to a larger company.
People in technological roles most likely to stay in the industry
The study examines the characteristics of the new workplaces of 4,300 people who found new jobs after being laid off, and finds that 84% of them stayed in the technology sector. Naturally enough, people in technological roles are 1.3 times more likely to stay in the industry than those in other roles, and over 90% of those in technological roles found new jobs in the high-tech industry. The more that the skills required for a job are unique to high tech, the more likely someone in such a job is to stay in the industry. The findings indicate a clear difference between product roles and business roles (marketing, sales, customer relations, and so on). The skills of those in business roles are more general and more adaptable to other sectors.
Dr. Assaf Patir, chief economist at RISE Israel, who compiled the study together with Tigist Mekonen, said, "The wave of layoffs in Israeli high tech came after two years of dramatic growth in the peak period. Although this was a challenging phenomenon for many workers, a substantial proportion of those laid off find work within a few months, and most of them stay in high-tech.
"At the same time, there are significant differences between different groups. The ones who find it harder than others are young workers, with the high-tech industry displaying loyalty to long-serving employees. Looking at it more broadly, the wave of layoffs created a movement of workers to smaller companies at earlier stages. The picture that emerges from the study is a complex one. On the one hand, it shows the dynamism of the Israeli high-tech industry, with a redistribution of human capital within it, while on the other hand it highlights the significant gaps between different employee groups in the industry."
Published by Globes, Israel business news - en.globes.co.il - on July 30, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.