Number of unemployed software developers doubled over past year
Number of unemployed software developers doubled over past year
Despite the low unemployment rate in Israel, the number of job seekers for each available position increased in the last 12 months by about 45%. The deterioration is especially evident in professions that are considered relatively strong in the labor market, like software developers and lawyers
The number of unemployed people in high-income professions is increasing, despite the low unemployment rate. The number of unemployed software developers in Israel has more than doubled in a year from 2,351 in July 2022 to 4,966 in July this year. The number of lawyers seeking work increased by more than 50% during that period. This is according to the Employment Service's "Labor Market Pulse Report" for July, published on Thursday and data requested by Calcalist. In April 2022, the number of software developers seeking work was only 1,863 and has since grown by 167%.
In recent months, the labor market has been characterized by the weakening of the strong, that is, by an increasing number of job seekers from professions with high income. The number of job seekers from the legal professions, for example, increased by 11% from 1,129 in June to 1,264 in July, continuing the trend that was already felt between May and June. Last July the number of lawyers seeking work was only 825 and since then it has increased by 53%.
At the same time, there was a 5% increase in the number of software developers seeking work from 4,726 in June to 4,966 in July. The increase in the number of unemployed high-tech workers has risen almost continuously from April 2022. At that time, the number of software developers in need of work was only 1,863.
The number of vacancies in the field fell from a peak of 14,200 in February 2022 to a low of 5,350 last May, a fall of 62%. Those who wish can take solace in the fact that in June there was a 3% increase to 5,500. But it is doubtful whether this is the start of an actual recovery. The combination of a decrease in the number of vacancies with an increase in the number of job seekers probably shows that finding a new job in the software field is becoming a longer process than before and the market is changing from a market of employees to a market of employers. In another profession related to high-tech, engineers and technicians seeking work, also suffered a large drop off of 9% in vacancies from 4,100 in May to 3,750 in June.
By the end of July, the number of summer layoffs, which includes contract workers from the education field who are laid off for the summer vacation and the fall Jewish holiday period, reached 16,000, of which 11,000 were laid off in July. Only at the end of August will their final number be known. Summer layoffs are a negative phenomenon in the field of labor relations, in which employers send education workers to receive unemployment benefits in order not to pay their salary during the summer period and to prevent them from accumulating social rights. It is especially prevalent in ultra-Orthodox society.
At the same time, there was a large increase of 15% in the ratio of job seekers to vacancies from 1.24 in June to 1.43 in July. Compared to the same month last year, this is an increase of about 45%. The meaning of the figure is that there are close to 1.5 jobseekers competing for each vacant position today, compared to only 0.99 in July 2022 and a low of 0.93 in June 2022. Since unemployment in Israel remains low and stood at only 3.4% in July, the change mainly reflects the continued decrease in the number of vacancies. It dropped from 151,000 vacancies in July 2022 to 117,000 in July this year.
The increase in the number of vacancies in 2022 was due to the changes in the labor market following the pandemic, which created a mismatch between the jobs and the unemployed. It moderated the increase in the employment rate during the recovery period from the crisis. The decrease in the number of vacant jobs now indicates a growing match between jobs and skills and it helps prevent a decrease in the employment rate and an increase in unemployment. The ratio of job seekers to vacancies is still relatively low compared to the period before the pandemic, which was then between 1.6 and 1.8.
First published: 12:16, 24.08.23
