C-Level execs feeling impact of tech crisis with salaries decreasing and job search duration doubling
C-Level execs feeling impact of tech crisis with salaries decreasing and job search duration doubling
There has been a steady decrease in salaries for Israeli C-level tech executives as well as an increased job search duration in the last year
Israel’s tech sector, the engine of the Israeli economy, has been doubly hit by both the global and domestic economic downturn. This has impacted the number of open positions, salaries and job search length across the board, and C-level executives have not been left immune. According to data shared with CTech by Israeli recruitment firm Ethosia, there has been a steady decrease in salaries for Israeli C-level tech executives as well as an increased job search duration in the last year. This is consistent with earlier data reported regarding junior and senior roles, although the drop in salary and increased job search time is not as extreme.
According to the data, collected from August 2022 to August 2023, the salary for C-level positions has decreased across the board. The most significant salary drops are for Head of Product from 43,000-46,000 NIS ($11,241-12,026) to 36,000-39,000 NIS ($9,411-10,196) and CEO from 55,000-65,000 NIS ($14,376-16,990) to 50,000-60,000 NIS ($13,069-15,683), although this still remains the highest salary reported. The salary for COO remains the lowest at 33,000-35,000 NIS ($8,625-9,148), but it has been least affected, with the minimum salary remaining the same in the last year and the highest expected salary only slightly falling.
The job search duration has also increased for all roles, and has nearly doubled for most of them, indicating that there is a disparity between the number of open positions and the number of prospective applicants. The longest job search length is for CEO which has nearly doubled from 9 to 16 weeks. The next highest job search lengths are for COO and VP HR at 11 and 10 weeks respectively.
There is little sign that these trends will reverse any time soon. While European and American tech sectors have begun to show signs of recovery, with rising investment and more jobs opening, this has not been the case in Israel. Unlike the U.S. or Europe, Israeli tech is highly dependent on foreign investment, which has gone down by roughly 70%. Liran Chen, CEO of Alljobs Match, notes that this is due to the difficult economic environment. “Today it’s more difficult to raise money, mainly fueled by the growing interest rates, which means cutting down on the workforce and almost bringing recruitment to a halt. For young companies, investors are pressing harder on cost cuts and understanding the path to profitability.”
Eyal Solomon, CEO of recruitment firm Ethosia, says that it is clear that this is “the direct result of the domestic situation,” namely the government’s judicial overhaul and the political and economic unrest that it has caused. “The fuel of the tech industry is blocked - it inhibits the flow of money, the raising of funds etc. Some VCs have lost 60-70% of funding and it's worse for local startups,” Solomon says. “You don’t see this trend in the US or elsewhere.”
Chen says that the judicial overhaul has created an extra layer of uncertainty that had an impact on the sector. “We have a healthy ecosystem and most companies made very quick adjustments, but in general people are more reluctant to invest and new companies are registering abroad. Uncertainty is bad for every sector but especially for a sector that is very dependent on funds coming from abroad.” However, Chen is actually optimistic about the future of the industry, saying that “the impact is not as bad as we thought it would be, but it might be that we are at a standstill in which the parties involved are waiting to see what the next move will be.”
While executive roles haven’t remained unaffected, there is no question that the bulk of the impact is being felt by lower-level employees. For some, this is a natural and expected result after years of tech growth. Maya Pretsfelder, an Engagement Manager at the Israeli office of Heidrick & Struggles, a global Executive Search Firm, says “From an executive talent perspective, the market is neutralizing the playing field compared to how it was in the last couple of years. We’ve seen downturns before, we’ve seen the market go up and down. This is just the market correcting itself.”
Cheli Nachman, Managing Partner at the Israeli office of Heidrick & Struggles, says that the executive job market has remained largely consistent. “VP R&D and VP Product roles are consistently rising and Chief AI Officer and VP Data roles are starting to become more popular.”
The tumultuous tech sector in Israel has prompted many employees to seek relocation abroad. “Candidates are definitely more inclined to relocate. We aren’t seeing the impact of it yet - but eventually we may see the impact soon if the financial situation abroad continues to improve compared to Israel,” says Chen.
In addition to relocation, Solomon notes that many companies currently operating in Israel are choosing to hire or expand abroad rather than within Israel. “Compared to 2019-2020 the trend is to hire employees from elsewhere including India, the U.S. etc.”
Nachman says that the issue of relocation is more nuanced than simply a response to the domestic political situation. In part, it’s driven by the rise in working remotely since COVID. “People choosing to relocate is as much a result of the hybrid work model, and the flexibility to work from anywhere,” she adds. Furthermore, “it’s not a simple process to relocate. It involves work visas and uprooting entire families.”
See below for a detailed breakdown of C-level executive tech roles and how they have changed from August 2022-August 2023.
1. Head of Software Engineering
What: The senior leadership position within a company responsible for overseeing the software engineering function of the business.
Salary: The salary has decreased from 39,000-43,000 NIS ($10,195-11,241) to 37,000-40,000 NIS ($9,672-10,456).
Job search duration: The job search duration almost doubled from 5 to 8 weeks.
2. Head of Hardware Engineering
What: Head of hardware engineering oversees all activities related to hardware engineering within an organization.
Salary: The salary has dropped from 38,000-43,000 NIS ($9,934-11,241) to 35,000-38,000 NIS ($9,150-9,934).
Job search duration: The job search length has almost doubled from 5 to 8 weeks.
3. Head of Product
What: The head of product oversees product development, manages other team members and ensures products align with the company's product and overall business strategies.
Salary: The salary has significantly decreased from 43,000-46,000 NIS ($11,241-12,026) to 36,000-39,000 NIS ($9,411-10,196).
Job search duration: The job search duration has risen from 4 to 6 weeks.
4. VP Research & Development (R&D)
What: The VP R&D leads research for the adoption of new technology and equipment to improve the organization's operations and business.
Salary: The salary has decreased from 43,000-48,000 NIS ($11,241-12,549) to 40,000-43,000 NIS ($10,457-11,241), remaining the highest reported salary.
Job search duration: The job search duration has increased from 5 to 8 weeks.
5. VP Technology
What: The VP Technology is in charge of overseeing all technological operations in a company while managing the workforce involved, ensuring efficiency and smooth workflow.
Salary: The salary has decreased from 42,000-46,000 NIS ($10,980-12,026) to 41,000-45,000 NIS ($10,712-11,758).
Job search duration: The job search duration has increased from 5 to 8 weeks.
6. VP Human Resources (HR)
What: The VP HR is responsible for the effective operations of an organization's human resources department.
Salary: The salary has decreased from 38,000-44,000 NIS ($9,934-11,500) to 35,000-38,000 NIS ($9,148-9,934).
Job search duration: The job search duration has nearly increased from 6 to 10 weeks.
7. COO
What: The COO is tasked with overseeing the day-to-day administrative and operational functions of a business.
Salary: The salary has only slightly decreased from 33,000-37,000 NIS ($8,625-9,671) to 33,000-35,000 NIS ($8,625-9,148).
Job search duration: The job search duration has increased from 7 to 11 weeks.
8. CEO
What: The CEO is the highest-ranking executive of a firm and acts as the company's public face and makes major corporate decisions.
Salary: The salary has gone down from 55,000-65,000 NIS ($14,376-16,990) to 50,000-60,000 NIS ($13,069-15,683).
Job search duration: The job search duration has increased from 9 to a staggering 16 weeks.
First published: 09:58, 20.09.23
