The plight of juniors in Israel - inexperienced employees who are struggling to gain a foothold in the tech industry - is getting worse. The average job search time for a junior (less than two years of experience) has increased to 11 months compared with 14 weeks in the industry as a whole, while the number of new jobs opening up for first-time job seekers each month has crashed from an average of 300 to a single digit. This is according to a report by Ethosia - one of the largest placement companies in Israel's tech industry.
The lack of opportunities provided by employers is part of a disturbing global trend, as shown by new data from the World Economic Forum (WEF). According to the WEF, although the tech industry should grow by 14% by 2030 - a rate equivalent to 170 million new jobs - the lion's share will be focused on advanced fields. Big data, AI analysts and fintech engineers are at the top of the list of in-demand professions, while about 8% of existing jobs, mainly entry-level positions, are expected to disappear due to automation and advanced technologies.
Ethosia's report also reveals that 85% of companies plan to invest in training their current employees, and 50% are considering moving employees from functional roles to tech growth roles. The significance is twofold: not only is the number of junior positions being reduced, but the new positions that are being opened are also being filled by veteran employees who are undergoing retraining. At the same time, according to the report, 41% of companies worldwide plan to reduce their workforce by 2030, due to the development of AI.
Furthermore, the war has also forced the tech industry, like the rest of the economy, to become more efficient and "lean" and to take fewer risks, and the focus has shifted, among other things, to a smaller and more experienced workforce. In other words, if employees are already being hired, priority is given to candidates with experience who are not a 'gamble.'
There is also already a slowdown in the growth of the workforce in Israel's tech industry in Israel. At the end of 2024, the tech industry had 417,000 employees, an increase of less than 1% compared with 2023, compared to an average growth of 4% in previous years, according to the Ethosia report. Foreign investments also fell by 60% last year compared with 2023, which led to the closure of many startups and a dramatic reduction in funds raised.
Meanwhile the average salary in Israel's tech industry is rising. Between October 2023 and October 2024, the average monthly salary rose 4.7% to NIS 30,915.
"A generation falling between two stools"
College graduates tell of their struggles on social media. Y., a computer science graduate from Ben-Gurion University, shared the compromise she was forced to accept in a Facebook group for candidates just starting out: "After two years of job hunting and experience in personal projects, I decided to go for a position that wasn't pure development. There's a touch of code, it's a high-tech company, I work in a team under developers - but it's not exactly what I dreamt of. The hope is to advance from within and gain experience, even if it's partial. I try to look at it as an opportunity to learn about the industry from a different angle."
A., who has a B.Sc. in Electrical Engineering from the Technion, tells Globes: "When I started the interview, they knew at the company that I was about to finish my degree. I passed the second stage, and then the interviewer told me, 'But you still have two semesters to go.' I said, 'That's right,' and they said, 'We're sorry.' They wanted someone with at least 18 months of experience," A. shares his frustration. "It's a paradox - how can you gain experience when no one is willing to give you a first chance?"
"I feel like we're a whole generation falling between two stools," shares a recent graduate from the Hebrew University. "I have a degree in computer science, good grades, projects on GitHub - and yet I find myself competing for one job with 200 other candidates who look exactly like me."
Another student describes the depth of the crisis, even though he studies at the institution that puts the biggest number of graduates on the market - the Open University. "In the last six months, I sent CVs for about 300 student and junior positions. I only received a response from one place, where I went through three stages of interviews and in the end they probably chose someone else," he tells Globes. He describes himself as having experience in personal projects with a variety of modern programming languages. "Many of my friends choose to continue on to a master's degree, not out of interest but because it's better than sitting at home without a job."
According to data from the Ministry of Labor, the Computer Science Faculty at the Open University is the largest in the country, with a one third of the students at the institution, and its graduates lead in earning capacity with a significant gap of NIS 5,000 per month over Technion graduates and NIS 7,000 more than the Hebrew University. For reference, in the previous report the gap was only NIS 500.
"To take advantage of the time"
"The most difficult situation today is actually for computer science graduates, more so than for me and my fellow electrical engineering graduates," shares the Technion graduate. "There is significant hype around the world of AI and processors, which makes electrical engineers more in demand compared with software engineers. Companies like Nvidia are pulling the market up in the hardware fields."
Ethosia CEO Eyal Solomon tells Globes, "The industry is undergoing a fundamental transformation. If in the past a degree in computer science was an almost guaranteed entry ticket to high-tech, today we see that the emphasis is shifting to specific fields such as quantum computing and AI. Students thinking about advanced degrees need to adjust to these demands."
Solomon also talks about the choice by many graduates to continue their academic career. He says, "There are students today who choose to do a master's degree not necessarily out of pure academic desire, but as a strategic decision." He explains that "Instead of facing a difficult job market at the age of 26, they prefer to invest two more years in studies and enter the market at the age of 28, but with a significant advantage. Moreover, if they don't find a job anyway - it is better to take advantage of the time spent studying. When the market is not as rewarding as expected and the offers received are not really advanced, a master's degree in a field that is in demand such as AI or electrical engineering can be a smart gamble."
Despite the complex picture, industry experts also identify bright spots. "I am optimistic about the future," concludes Solomon. "As soon as the geopolitical and economic situation stabilizes, we are expected to see a significant cut in job search times. Israeli industry is known for its flexibility and ability to recover. The question is not if the situation will improve, but when."
Published by Globes, Israel business news - en.globes.co.il - on January 21, 2025.
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