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Shalom From the Silicon Vadi of Israel

February 26, 2001
Related Topics: Global Business Issues, Featured Article
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Many changes have occurred in Israel'sSilicon Vadi, a nickname for our own hi-tech empire much like Silicone Valley,California. In the course of four months, we went from self-assurance andeuphoria, to doubtfulness about the future. Nevertheless, we charge full speedahead.

    In light of theNASDAQ fall and other high-tech bourses, we have suffer immensely from theambiguity of the current political situation. Although the terror has notpenetrated the vicinity of our workplaces, we still have concerns for thefuture.

    The recent electionhas added a new level of insecurity to our daily lives, as well as most Israelicompanies in the 'outside' world.

We worry at home but westill overcome our hardships at the workplace. Unfortunately, we have a lot ofpractice.

    When the new 'Intiphada'(Palestinian unrest) erupted, some surveys showed that more workers than beforewere interested in relocating to other branches on the outside.

    HR managers weredealing with other difficulties, including family members who were placed indangerous situations and the killing of co-workers. For example, one of thereserve soldiers lynched in Ramallah during the Intiphada was an employee ofXerox Israel. The company did not emphasize this fact but fellow workersunderwent shock and trauma.

    The Israeli workarena has changed immensely after the big multi-national companies entered. Ithas changed tremendously in less than a decade. Many global companies came hereto start an R&D center, and a majority of the Israeli companies went global.

    Besides unionizedworkers, who comprised the vast majority of Israeli workforce, only a handful ofhigh-tech companies are still unionized.

    This shift hadtremendous influence over the modes of operation for companies. It brought inAmerican work norms that are both positive and negative.

    On the one hand, HRfunctions became more professional. Promotions that were once based on seniorityare now based on merit and performance. But we also witness norms that have beenhard to cope with especially during times of trouble. A big multinational firmhas closed down one of its two branches in Israel. It was a successful start-upthat did not serve the company's purpose anymore. The company fired all itsemployees and led them to the gates with guard escort.

    Israeli Hi-techcompanies are coping with HR issues that were only known in the United States upto this point, especially recruitment and retention issues.

    Similar to theUnited States, we have to cope with the deep fall of share prices. Also, theappeal of option plans is fading. Many of the options are underwater, whichmeans they are no longer lucrative. Employees are holding on, waiting for thingsto improve and share prices to rise.

    Israeli workers whoused to be more loyal have started to wander between companies in the last fewyears. In some instances the current NASDAQ and political situation slowed downthe processes of turnover. HR managers try to help by developing various tools,including better communication programs. Large companies have tried to imitatethe start-up spirit and enabled their workers to take part in innovationprocesses, etc.

    The NASDAQ and ourcurrent political situation, together, hurt the Israeli Hi-tech sector.Nevertheless, Israeli HR managers, as well as other Israeli managers andworkers, are accustomed to hardships. We worry at home but we still overcome ourhardships at the workplace. Unfortunately, we have a lot of practice.

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