Salaries in Israel’s technology sector, which have always been high and which we have become accustomed to see constantly going higher, took a hit in 2024, according to a comprehensive report from placement company Ethosia, which specializes in technology jobs.
According to the report released today, for the first time since the Covid pandemic, average pay in the technology industry in Israel fell, by 3% this year, to NIS 29,900 gross monthly. This is still 2.3 times the average wage in Israel, but the decline is a significant deviation from the rising trend of recent years.
The report also reveals that those mainly impacted are the Israeli industry’s future generation. Junior employees with less than two years’ experience are in a particularly tough situation. The average time taken for them to find jobs has reached a record eleven months. From 300 junior positions a month in 2023, the market has shrunk to just a handful a month in 2024.
The report finds that the only employers currently hiring are large and international companies, and they show a preference for recruiting outstanding candidates with degrees from leading universities.
"Political and security uncertainty, a decline in investor confidence, and volatility in the global economy, have depressed the Israeli technology industry, with constraints on exports and damage to competitiveness also presenting a significant challenge," says Ethosia CEO Eyal Solomon.
The number of job vacancies sank from 12,750 in December 2023 to 9,200 in December 2024, a decline of 28%. For the first time in a decade, the number of workers in the industry has hardly grown. At the end of 2024, the workforce numbered 417,000, representing a rise of less than 1% from the 413,000 total at the end of 2023. This compares with average annual growth of 4% in previous years.
"The rise in government spending because of the war has hit investor confidence hard," Solomon says. "As is well known, the high-tech industry is dependent on investment from outside Israel, and this has declined by 60% in comparison with 2023. As a result, many startups have had to lay off employees, and a substantial number have shut down because of the difficulty in raising capital."
Signs of recovery
All the same, there are some initial signs of recovery: during the time that the report was written, the number of job vacancies in the industry rose 10%.
"The decline in the intensity of the fighting and in the number of reservists on active duty, along with political certainty in the US after the election results became known, represent excellent opening conditions for 2025," says Solomon.
"Positive forecasts from the Ministry of Finance for lower inflation and stability in interest rates will help the market to correct itself and change trend in 2025, and to return to the growth rates seen in 2022 after the pandemic, in numbers of new companies, in the number of jobs, and of course a recovery in capital raising," he concluded.
Published by Globes, Israel business news - en.globes.co.il - on December 26, 2024.
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