Can Palestinians ease Israel's tech employee shortage?

High-tech office Photo: Shutterstock

Israel wants to issue permits for 500 Palestinian tech employees but there is little enthusiasm, with many preferring the 'remote' employment status quo.

On Sunday, Israel's cabinet approved granting permits to Palestinian workers in the tech sector. In practice this means that Palestinian programmers and engineers living in Judea and Samaria will be able to come to their job in Israel every day and become rank and file employees in Israel's high-tech industry. That is if they can find an employee that agrees to hire them and pay a monthly salary of at least NIS 17,000.

This is part of a plan led by Innovation Minister Orit Farkash-Hacohen with the support of Minister of Interior Ayelet Shaked and Prime Minister Naftali Bennet himself designed to help Israel's tech industry cope with the shortage of tech workers while also promoting reforms on taxing the profits of tech companies and venture capital funds. As part of the plan, programs are being set up to grant work visas for foreign tech experts and experienced tech employees to come and work in Israel as well as to encourage and to provide incentives for Jews in the Diaspora to immigrate and Israelis living in the US, UK and elsewhere to return home. Foreign students studying in Israel will also be given work permits to remain for a limited period and there will be more funding for Ph.ds and post-doctorate studies in artificial intelligence (AI).

Unemployment in Palestinian high-tech

Despite the headlines made by the decision to allow Palestinian tech workers into Israel, in the pilot stage only 500 work permits will be granted. Only after that will an inter-ministerial committee be set up to examine the effectiveness of integrating Palestinian employees into the Israeli tech sector, its influence on Israeli employees in the sector and its impact on the Palestinian economy. The committee's findings will determine whether the plan is extended, expanded or cancelled.

In other words, we won't see a wave of Palestinian programmers from Ramallah streaming into Tel Aviv until at least 2025. Meanwhile 500 Palestinian tech employees is only a drop in the ocean when the Israel Innovation Authority provides a conservative estimate of a shortage of 14,000 tech employees in Israel. At the same time, according to the Ministry for Regional Cooperation, there is high unemployment in the Palestinian tech sector with an estimated 22,000 tech graduates unable to find jobs in the fields that they studied as well as an additional 5,000 unemployed Palestinian engineers available for immediate employment. According to Israel's Ministry of Interior, 75% of university graduates in engineering and technology disciplines in the Palestinian Authority cannot find suitable jobs for their talents.

Despite the good will, senior executives in the tech sector in the Palestinian Authority find it difficult to welcome the plan. Tareq Maayah is CEO of Exalt Technologies, a company based in Ramallah, which employs 280 people and provides software services to Israeli and international companies. He said, "There is no high-tech unemployment in the Palestinian Authority. There is no employable worker who is not already employed. We have more demand for high-tech employees than supply and we work hard with the universities and training institutes to keep up with demand. If anything, the plan will cannibalize Palestinian high-tech with the best moving from one company to another for a higher salary."

The contradiction between the Ministry of Interior figures and Maayah's words stem from the fact that many of the unemployed don't meet the threshold demands for Palestinian tech companies that are similar to those of Israeli companies.

Lack of interest

Most of the Israeli tech companies contacted expressed a lack of interest in the plan. Many Israeli tech companies and the development centers of international tech companies employ Palestinian tech workers through outsourcing, and the plan includes no incentives for directly hiring these employees. Here are some typical questions and answers that will help Israeli entrepreneurs get acquainted with the program.

Can any Palestinian programmer apply to work in Israel?

The program is only open to high-tech employees in Judea and Samaria and they must be located in advance by an Israeli tech company before receiving a permit. The request for a permit is submitted to the Population and Immigration Authority by the Israeli company, which is recognized as a high-tech company by the Israel Innovation Authority, and which is seeking to employ a specific Palestinian after finding him or her. After the Population and Immigration Authority approves the application, it contacts the Civil Administration in Judea and Samaria to allow the Palestinian employee to visit Israel on a daily basis. In the event that the Palestinian employee leaves their job, the procedure will allow them to keep the entry permit while looking for work with another Israeli tech company.

A company that is interested in employing a Palestinian programmer must pay a salary of at least 150% of the average Israeli monthly salary - in other words NIS 17,000 or more. This is a high amount for what Israeli tech companies are used to paying in Judea and Samaria where a good high-tech salary is about $3,000 (about NIS 9,300). Compared with Israeli tech salaries, this is a low salary, which might only be paid to a tech employee who is new in the industry with a year or two of experience at most.

I already employ Palestinians as remote employees, why do I need all the bother of getting them through the checkpoints every day to Tel Aviv?

Estimates are that there are already 600-1,000 Palestinian programmers employed remotely by Israel's tech industry through local contractors in Ramallah, Bethelhem and Beit Jallah. Such companies include: ASAL Tech in Ramallah, which works with the development centers of Nvidia, Cisco and Intel in Israel; Exalt, also based in Ramallah, which serves Israeli startups like Cato Networks, Quilt and tech giants based in Israel like HP and Nokia.

Israeli companies won't be in such a rush to give up on the current remote "offshore" model for employees from the Palestinian Authority, which allows them to pay a low salary of $2,000-$3,000 per month. However, several companies did express readiness to pay the higher salary of NIS 17,000 or more for highly talented employees.

Cato Networks head of automation Elad Baram, who has already been employing 15 Palestinian engineers in Ramallah for the past three years through an outsourcing company said that the plan could help him to employ two Palestinians directly.

The problem of the checkpoints

Directly hiring Palestinian programmers and expecting to see them in the office every day is problematic and Israeli tech companies understand this. Issuing work permits to high-tech employees, just as permits are issued to agricultural and building workers, is a fluid matter. Security incidents and various emergency situations can close the checkpoints on the West Bank at any given moment.

"The problem is the checkpoints are unpredictable even for somebody who has a work permit for Israel," said Maayah. "While the Population and Immigration Authority promises that tech workers will get through faster, Maayah claims that a work permit holder can get though checkpoints within ten minutes one time, and then in 90 minutes the next time."

Manufacturers Association of Israel, High-Tech Association president Marian Cohen said that the plan is more relevant for engineers are operators of sophisticated machinery in tech plants than for programmers who can undertake remote work. "But there is no place for setting a minimum salary because salaries are set according to the market price. If it is worth it for Palestinian employees to come here then they will come."

Published by Globes, Israel business news - en.globes.co.il - on November 11, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

High-tech office Photo: Shutterstock
High-tech office Photo: Shutterstock
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