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How to get rid of outsourcing: The Israeli IT industry

This article was originally published on January 12, 2019, and is re-posted here with permission.

It was originally posted on January 25, 2019. 

When it comes to Israel’s IT industry, there are no more “outsourcing” jobs. 

It is the opposite of outsourcing.

The Israeli IT sector is a multi-billion dollar industry, employing hundreds of thousands of people in fields ranging from IT design, software development and outsourcing, to security, manufacturing, and logistics. 

The Israeli government and Israeli IT companies are the best at what they do, as Israel is the world leader in IT, with the second-highest number of IT jobs in the world. 

“There is no other industry in Israel where there are so many jobs,” said Zvi Gershon, head of the Tel Aviv-based Israel IT consultancy and research group. 

Gershon explained that it is a case of the Israelis taking the best of the best, the best in terms of the technologies that are available and the talent pool. 

There are many factors that come into play, but the main one is the level of technological capability and innovation, he said. 

This makes it hard to do business in Israel. 

Companies are also not as interested in investing in IT as they are in software development. 

Israel’s IT market is also a big one, with almost half of the country’s companies being based in Israel, Gerson explained. 

Most of the companies are based in the US, UK and other countries, and many of the employees are based there, too. 

These companies are also a part of Israel’s tech boom. 

In 2018, Israel’s annual IT exports stood at $2.9 billion, with $1.2 billion coming from the US and $1 billion coming out of the UK. 

According to the Israeli Business Council, the country also has the highest growth rate of all countries in the tech sector. 

That growth is due to its “high quality” and “high innovation”, Gersons job description. 

One of the reasons for the high growth in Israel is that the country is “one of the few countries in world where there is a strong IT market.” 

“The best IT talent is being attracted to Israel, because Israel has very strong talent and is not getting that quality talent,” Gersong said.

“The problem with the UK and the US is that they have a huge IT talent shortage. 

With the US’s huge tech talent shortage, they don’t know what to do with that talent, so they hire IT workers from other countries.” 

Israeli IT jobs are also highly competitive. 

At the moment, there is one Israeli IT company with more than $3 billion in revenue, which has its headquarters in Tel Aviv. 

For companies to grow, they need to attract talent and keep it for long-term, Geringhon explained, adding that there are also companies that need to invest in technology development.

Gersong also said that Israeli companies should focus on innovation, rather than just making software. 

“[Israel is] very innovative,” Geringhon said.

 “This is why Israel has such a great technology sector.

If you can develop something, then you will have more and more talent that can be put to use.” 

It was recently reported that Israeli software developers are getting their salaries slashed in recent years. 

Israeli companies such as Apple and Google have also been accused of cutting their employees’ salaries. 

However, Ginghoff says the real reason for the reduction is because the Israeli government is restricting the salaries of IT professionals. 

Currently, there has been a reduction of nearly 40% of the salaries paid to employees in Israel over the past two years, he added. 

So how can Israeli IT professionals get their jobs back? 

“As of now, we are in a precarious position,” Ginghons told Al Jazeera. 

While the government has reduced salaries for IT professionals, they will still have to work on their salaries during their working hours, which will make it harder for them to keep their jobs, he noted. 

Even though the salaries are reduced, there’s no guarantee that the employees will get their job back, Gingers said.

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