Huge waste of the Russian Human Resources

The war in Ukraine has created a new reality in the tech labor market: tens of thousands of programmers and tech workers escaped from the country to avoid joining the Russian army and taking part in the war, but surprisingly – they were not successfully received in western countries. Lately, the Wall Street Journal has estimated that nearly 20% of the tech workers in Russia have fled from the country, and although no one knows their exact number, it is surely a large one. Based on various estimations, the hi-tech sector makes up about 6% of the Gross National Income, but it was considered one of Russia’s most significant growth engines before the invasion on February 24th. Also, this sector does not have an exemption from taxation.

In the first days of the war, several companies tried to recruit the fleeing tech workers, but recently we have noticed a new phenomenon: countries refuse to grant visas to Russian tech workers, so they find themselves helplessly wandering. Lately, Techtime met a group of Russian programmers who arrived in an Asian country and temporarily stayed on a student visa. They desperately describe how most of the western countries are shut to them and refuse to open their gates, temporarily or permanently.

The picture depicted from their personal story is of a mass escape. One of the younger developers in this group is a software applications UI developer. Her former firm employed around 2,500 employees before the war. According to her story, most of the employees spread out around the world, while roughly 10% remained in Russia, being tied up to their families. Those are highly skilled employees that were educated in cultural and economic centers such as Moscow or St. Petersburg.

No one wants the Russians

When they left Russia, they were certain they would be welcomed with open arms in the developed countries, which are crying out for tech talents. Nevertheless, they have now realized they are not welcomed in most countries. “No one wants the Russians”, she says with despair. Israeli experience shows that the contribution of Russian tech workers to the industry could be enormous. Following the large Aliyah waves in the 1990s, they were smoothly integrated into the Israeli industry, and today it’s hard to imagine the development of the tech and electronics markets without Russian employees. Anyone who has visited the R&D labs or production lines in recent years knows how common the Russian language is in the industry.

From this point of view, it is hard to understand the conduct of the countries in the western world: not only do they need the Russian workers, but they are also willing to weaken the Russian tech sector. The sanctions and boycott of technological supplies to Russia are the building blocks of the western objection to Russian aggression. So, why are the workers being neglected? There is a great fear that a substantial portion of this group will have to go back to Russia and re-integrate into the industry – but this time in weapon and military technology areas. According to our estimate, this will be a huge mistake with a heavy price – both humanitarian and economic, and even a military price in the future.


Translated by P. Ofer

Salaries in the Israeli Industry rose by 25%

According to a recent report by the Central Bureau of Statistics, the average salary in the computers, electronic products and optical devices manufacturing industry in Israel amounted to NIS 22,411 per month ($6,580) in 2019. The report covers 2019 data and does not include the impact of the COVID-19 crisis on the industry. This constitutes an increase of about 25% compared to 2015, in which the average salary amounted to NIS 19,885 ($5,840).

At that time there was a very small change in the number of workers in the industry: in 2015 it included 68,200 employees, while in 2019 this number reached roughly 69,800. The meaning is that the rise in salaries indicates a shortage of manpower in the industry. In the entire high-tech industry, the average salary amounted to NIS 23,545 per month in 2019 – more than double the national average salary – which amounted to NIS 10,783 per month.

This industry that provides almost a tenth of the employee jobs in the economy: 323,400 jobs out of 3.74 million jobs in the entire economy. The main component of the industry is the provision of software and communications services, which accounted for approximately 227,400 employee jobs in 2019.

In practice, the number of employees in the electronics industry is slightly higher than the CBS’s estimates, since in the official data, the local 49,900 R&D workers are grouped inside the High-tech Services category. In 2019, the Israeli industry employed about 49,900 R&D workers, whose average salary was NIS 28,000 a month.

The main problem is that during that period there was no increase in the industry’s output, and exports even fell slightly. In 2015, Israeli exports of computers, electronicS and optical equipment amounted to approximately $12.59 billion – constituting an all-time Israeli record. Then began a decline that reached a low of $10.5 billion in 2009, and in the following two years exports recovered slightly and reached approximately $11.42 billion in 2019.

The conclusion is that the Israeli electronics industry has reached the year of COVID-19 when it is in a dire situation, facing a decline in output and sales – along with a significant increase in expenses.