Israeli startup CEO says 'stop the salary madness'

Avi Golan Photo: Rotem Lahav PR

anyVision CEO Avi Golan tells "Globes" that by jumping from job to job for higher pay, young Israeli tech employees are harming their companies and their own careers.

"You look at the CV and you see that candidates have jumped around between four and five jobs within five years because they were offered salaries and benefits. Today an employee is in my company because I offered him 20% more and tomorrow he is at another company because they offered him a Playstation5 or other benefits," Israeli facial recognition company anyVision CEO Avi Golan told "Globes."

Golan has become a much talked about figure this week in Israel's tech sector following a post in LinkedIn headlined #stopthemadness. In the post, Golan called on his fellow CEOs, especially in the tech sector, to stop what he described "recruitment madness" before the bubble bursts. In the post Golan claims that the rise in salaries and "illogical benefits" are harming the young generation of engineers, who are not learning the basics about building a career, and which will ultimately cause development jobs to be transferred abroad.

The post received a lot of support as well as criticism. The critics claim that Golan is calling for CEOs to create an illegal association in order to cut the spiraling salaries in the tech sector. Another criticism heard was that anyVision, which only last week announced the completion of a $235 million financing round led by SoftBank, which has enough money to pay the engineers that the company fired at the start of the Covid-19 pandemic (before Golan became CEO) is in no position to complain. In his first interview since the post, speaking from San Francisco, Golan tries to answer his critics.

He said, "It's not logical and cannot continue like this because in practical terms it takes 18 months on average until an employee provides value to the company. Candidates come to us and I see the CV with all the job changes and you ask, why didn't you stay and where is the awareness about keeping and building the values of the company? We have to think about ways of explaining to the young generation that there are things that are more important than the salary and benefits."

On his decision to publish the post, Golan said, "In my conversations with colleagues and venture capital investors, I understood that all of them are preoccupied with the problem but nobody wants to speak about it. The problem is not the salary but that the competitive market influences employees who move from job to job and in fact aren't developing their career. You need 15,000 hours of work to achieve specialization in a field and if you don't get there then your capabilities remain shallow. I recall the situation we were in two weeks ago before we received the investment and there were employees concentrating on looking for other jobs, not because they don't believe in the company, but because they were being offered jobs in other companies with a higher salary."

In the end they'll hire workers in India or Eastern Europe"

Hiring tech employees has always been a tough task for high-tech companies but this year it has become even more challenging. The record breaking capital being raised by Israeli startups has injected huge amounts of money into the market and companies are trying to beat their rivals in getting products onto the market. This is creating a thirst for developers and engineers, who are a commodity in chronic short supply in Israel. All this has created a reality, which some have described as an employment wild west, with employees, especially in sought after areas like AI and cybersecurity, receiving offers all the time and their employers being compelled to raise their salary and offer benefits like signing on fees of tens and even hundreds of thousands of shekels.

Golan, who has lived for 20 years in Silicon Valley, claims that in California they have sobered up to a great extent from the aggressive competition for talented employees. "When Google, Facebook, Twitter and Microsoft were hiring many employees, the small companies also hiked salaries and benefits but that stopped when they understood that they were hiring the wrong talent, who were jumping from job to job because of the salary, and that wasn't the quality that they were looking for. What scares me is all this jumping and moving about. When you tempt an employee with a high salary you are not doing them any favors either."

Golan's LinkedIn post, which stirred up a storm, can certainly be understood as a call to employers to band together against salary hikes. But Golan denies that that was his original aim. "I wasn't coming from there. That distorts what I wanted to write. It wasn't a call to form an association but rather an attempt to see how to solve the problem of a lack of resources. If you offer more money, then somebody after you will raise more money and offer more. It will reach a ceiling and eventually companies will hire employees in India or Eastern Europe."

So what can the CEOs in the industry actually do?

"I don't have any major solution but we need to understand that there is a substantial problem here and we need to recruit the brains in Israel to see how it can be solved. There are all kinds of solutions. For example, when I was at Google we would contact students who were in their second year of studies, offer them a job and support them throughout the process. Large tech companies in the US have defined specific roles in industries where there is a shortfall, like data analytics, and they have spoken with the universities about opening special courses. If we don't develop this and build capabilities, then ultimately this bubble will burst."

It's difficult to hire after you fire

The timing of Golan's post is somewhat surprising, coming a few days after the company, which develops facial recognition systems for commercial and defense uses, raised $235 million led by SoftBank. While Golan talks about a bubble in the tech job market, other claim that startups like the one he leads are benefitting from the bubble of investments, which are flooding them with more money than ever before. And with so much money in the till, what's the problem with hiring employees?

"I don't think there is a bubble in investments," Golan said. "Coronavirus created a need for technology and we see very successful tech companies, not only in terms of these public offerings but also in terms of the size of the market and customers. What is a bubble is the employment market in Israel. I received the investment and I can do, and will do what other companies are doing, which is to offer attractive salaries in order to find talented staff because I am working in a competitive market. Do we have any other choice? But if we don't move forward on certain things and only raise salaries, then we will come up against the same problem again and again. I've flagged the situation because many of my colleagues are talking but not doing."

At the start of coronavirus, anyVision fired dozens of employees and now it is difficult for you to hire.

"That was a while ago and the company has undergone very difficult processes which harmed it market and required harsh measures. There are a number of employees who already returned from their previous layoff from anyVision and today we are hiring with a sense of family and talking about moving forward. To fire someone is not pleasant and it is always difficult to hire after you fire and it’s a stain that you carry with you but coronavirus was also not an easy time for many other companies.

You are engaged in the controversial field of facial recognition. Perhaps that makes it difficult for you to hire?

Not at all. Those who know our field understand. We are one of the most technological companies in the world of AI and computer vision and many engineers want to be involved with us. We have never had any problems hiring and apart from that we are looking for talent that is difficult to find."

Published by Globes, Israel business news - en.globes.co.il - on July 15, 2021

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

Avi Golan Photo: Rotem Lahav PR
Avi Golan Photo: Rotem Lahav PR
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