Until a few months ago, Israel’s high-tech industry attracted workers from across the economy. Instead of working as waiters, students fill programmer jobs for tens of thousands of shekels a month. Hundreds of workers from various fields have converted to religion. The transition itself is welcome for the development of the high-tech world and the economy in Israel. However, it led to severe labor shortages in all other areas of the economy during the troubled period.
The competition created by high-tech companies does not allow small companies to face them – in both the private and public sectors. In order to improve the conditions of their employees, the same companies increase the wages of employees and, as a result, are required to increase the prices of the products they sell – and here, only one level is dragged along with the development of high technology. Of course, we won’t forget the surrounding economy, food orders, apartment rentals – high technology tugged at the entire market and led to price hikes hitting the weaker parts of the day.
Ethan Biran is CEO of Mynextworker
Looking at the current economic situation, there is a shortage of workers for tens of thousands of jobs in various areas of the economy – particularly in the areas of restaurants and sales. One of the interesting things that happened in the shadow of the high-tech crisis, massive layoffs, and inflation was that the demand for jobs in certain areas increased significantly. Last week, we observed a 400% increase in job applications for waitresses in the Tel Aviv area and a general 35% increase in job applications. The data also shows a significant reduction of around 80% in candidate no-shows for job interviews – one of the main problems facing small businesses in recent years.
These staggering numbers, which seem a little disconcerting given the scary headlines about the workers crisis, are a direct result of the ongoing high-tech crisis. When workers are fired from high-tech jobs, they return to their jobs as lawyers, accountants, and economists – a whole chain that has been pulled thanks to the rise of the fast-paced decline of high-tech. Employees seek stability and less adventure, so they return to what they know.
This situation provides breathing room for exhausted business owners who have been chasing employees at an unprecedented rate for the past two years. This brings up another point: there’s a situation here that we haven’t seen before. Employees are privileged, employers are “controlled,” and bargained over everything. This is another correction that came with the high-tech crisis: today, it is no longer exactly that. People go back to work; wage conditions return to fair and decent proportions.
Sometimes I hear from friends who run businesses, even successful companies, that they work really hard, take risks, and at the end of the month, all these big businesses, built over years and demanding great sacrifices from their owners, almost non-existent.
The state should try to have as many independent business owners as possible, support them and not create more obstacles. Otherwise, it is not clear who wants to run the business – and this business is a catalyst for the country’s economy. We are at a dramatic point: after the ongoing crisis and upheaval due to the coronavirus pandemic, just as businesses are starting to “breathe the air”, another difficult period is coming for the economy. Meanwhile, it seems the only way to address the situation is to take a step back from the demands of rising wages and frequent job changes and understand that stability is needed. This will also help them to be able to earn more and develop themselves to the fullest.
Although the high-tech crisis has caused many people to lose their jobs, there has been an increase in the employment rate. The unemployment rate in the country has fallen to 3%, and jobs left behind due to the rise of high technology, including in restaurants and sales, are filling up very quickly and may even return everything to where they belong.
Ethan Biran is CEO of Mynextworker, an online platform that helps small businesses attract the right applicants and make better hiring.
