Economic challenges squeeze non-tech positions in high-tech sector
Economic challenges squeeze non-tech positions in high-tech sector
Despite the challenging economic environment, some high-tech companies are still growing and recruiting for non-tech positions such as marketing and sales. However, as efficiency becomes paramount, companies carefully consider each new hire. Today, there are more candidates than positions, making the competition for such roles tougher than ever.
During the high-tech boom years of 2021-2022, Israeli companies, especially the largest ones, recruited thousands of employees for non-technological positions such as marketing and sales within Israel. This trend opened doors for people who were not ‘techies’ or programmers to integrate into an industry known for being rewarding. The dream of working in high-tech became accessible to more people.
Now, with Israeli high-tech in one of its most difficult periods, even experienced tech workers find it challenging to secure jobs due to intense competition for every open position. For non-technological professions, the situation is even more difficult.
"The order of the day is to be very clear about what we want to receive from a given position. We simply do not compromise on talent. Every shekel should go to a place that knows what value it gives, so today we think ten times about recruitment even at the opening of the position and especially in non-technological positions." says Maya Szutan-Azoulay, a partner in the Lool Ventures fund. "If there were once trends of 'we'll recruit and see what happens', today we see it much less because this process has a price. It takes away from the company's runway and also consumes time, which is precious today, because all resources should be directed to increasing the company's value."
"The order of the day is to be very clear about what we want from a given position. We simply do not compromise on talent. Every shekel should go to a place that knows what value it provides. Today, we think ten times about recruitment, especially for non-technological positions," says Maya Szutan-Azoulay, a partner at the Lool Ventures VC fund. "In the past, there were trends of 'we'll recruit and see what happens,' but today we see this much less because this process has a cost. It shortens the company's runway and consumes time, which is precious today, as all resources should be directed to increasing the company's value."
According to her, the focus in companies now is on efficiency and the question of 'how much does it cost to bring the extra dollar in sales, for example.' If people need to be recruited, then who they are and how many are needed is carefully considered. The need for efficiency stems from the economic conditions. "Due to the war, the economic conditions are very difficult, forcing entrepreneurs to act with extra caution and responsibility," she says.
At the Israeli software company monday.com, which employs over 1,800 people worldwide, about two-thirds in Israel, they continue to recruit even today for non-technological positions. "Monday is in consistent growth and constantly recruits new employees to support our business goals. It has always been important for us to emphasize growth and significant activity here in Israel, both in development and non-technological positions," says Gal Ben Yacov, Senior Talent Acquisition Team Lead at monday.com. "Since the beginning of the year, Monday has recruited a large number of employees, over half of them in Israel. Among the non-development areas we are recruiting in Israel: marketing, sales, customer experience, design, and headquarters staff."
From 2018 to 2023, the number of employees in high-tech increased by tens of thousands. The peak was between 2021 and 2022 when 35,741 workers were added to the industry, according to the annual State of High-Tech 2024 report by the Israel Innovation Authority.
Although in recent years more large Israeli companies are selling tens and hundreds of millions of dollars annually, the main growth in employment still comes from research and development professions. As of 2023, 48% of industry workers are engaged in development, 22% in product positions, and the rest in business positions. During the high-tech boom of 2021-2022, there was even a shortage of workers. Some large companies at that time operated training centers for tech and non-tech professions like sales, promising successful trainees integration into the company.
But the decline began in 2023 due to the global economic situation. In Israel, there was a slowdown in high-tech hiring, with only 10,151 workers added that year, less than a third of the workers added a year earlier.
Since October 7, the most common change reported by companies in the Innovation Authority's survey is an increased supply of candidates. Competition for experienced tech personnel is still tough, but nowhere near as for non-tech candidates.
Shay Rotem, Global Talent Acquisition Team Lead at the cyber company Cynet Security, says that although the company has continued to recruit for non-tech professions over the past year, competition for each job is tougher. "Our recruitment team recruits for the USA, Europe, and Israel. Abroad, recruitment focuses on Go to Market positions such as sales and customer success. In Israel, recruitment is very diverse. Recently, we have seen a significant increase in applications for each position we advertise, about 2-3 times more. We are currently recruiting for all positions in Israel, from complex development roles to junior positions like Soc analysts, and continuing in finance, human resources, marketing, sales, and technical support. We have accelerated our recruitment pace, and our HR department has expanded due to the company's growth."
The Israeli cyber company Guardio has also noticed increased competition for every position. The company employs only workers from Israel. "There is always competition, and it is welcome. It makes us sharper and the processes more precise, but we don’t compromise. Recently, we have seen an increase in resume submissions and more responsiveness to our recruitment team's inquiries. However, there is also an increase in resumes that don't necessarily match the job requirements - quite a few people are looking to transition from other professions with an affinity for these positions. This increase in candidates can be attributed to recent layoffs and the desire of employees to work in companies that have successfully navigated challenging times. We see that suitable candidates do not compromise professionally or in terms of employment conditions," says Vered Shani, VP People at the company.
Despite this, the more common approach to recruiting for non-tech positions is to go abroad. According to Innovation Authority surveys, Israeli start-ups plan to do most of their recruitment abroad. At the same time, start-ups have reduced their manpower recruitment programs in Israel throughout the war. For example, start-ups employing 50-100 employees expect to increase the number of employees abroad by 15% while reducing their workforce in Israel by 2%. Companies with over 100 employees expect a 10% increase in employees abroad compared to a 3% increase in Israel.
"Even before the war, it was important for us to build a support system abroad for two main reasons. First, our customers are there. For support roles, customer management, project management, etc., it is crucial to be present where the customers are, in their time zones and cultural contexts. Second, we don’t want to be a company concentrated only in Israel. From a cultural standpoint, it’s not right. Our global teams lead their regions, which helps alleviate potential customers' fears during regional crises like the one we have been experiencing for nine months," says Daphna Keinan MorHaim, Global VP HR at the start-up company Shield, which develops a platform for detecting manipulations and frauds in the capital market and employs 150 people in Israel, England, Portugal, and the USA.
She says the company is still recruiting for non-tech professions in Israel and abroad. "We are in a period of business growth, needing people to support the customer side in post-sales and marketing tasks. Currently, in Israel, we have openings for CSM, recruitment, accounts, technical writing, and even a leading COO position."
Recruiting for non-tech positions such as marketing, customer service, and sales abroad also stems from practical considerations. "One must consider that some non-tech positions need to be filled outside Israel due to differences in time zones, language, and proximity to the target audience, especially in regions physically and culturally distant from here," says Monday’s Ben Yacov.
Szutan-Azoulay from Lool Ventures explains that for marketing and sales in English-speaking markets, you need people who speak the language. Even during boom periods, Israeli recruits didn’t replace these departments abroad. Now the focus is on cost-efficiency, not just growth. "Manpower in Israel working different hours than the target market is inefficient. With only four overlapping work hours, it's not productive. Therefore, companies prefer to recruit abroad for these positions."
