Outsourcing – Spotlight on Israel

Israel, although small and residing in an unstable region in the world, is a unique mixture of enthusiastic professionals and companies, which share creativeness and out of the box thinking. The tradition of entrepreneurial spirit is prevalent in Israel and this means many small businesses that are always looking for the next creative way to solve a problem.

There are two potential reasons for this mindset. Israel is traditionally a nation of immigrants, a group familiar with the idea of starting from humble beginnings to create a new life and taking risks – with nothing to lose, you might as well go for it. The second may rest in the mandatory military service, which encourages creative thinking as well as developing a diverse set of skills and contacts.  Within the military several intelligence and Air Force units have developed unique atmospheres that encourage creativity and entrepreneurship. Every three years introduces a new generation of highly skilled and motivated young professionals to the market, many with technological skills.

Wages in Israel are trending higher than in other potential outsourcing countries, mostly due to the complex ventures and high skill set. This is not necessarily a country in which you’ll find the cheapest workers, but you can count on finding solutions you may never have thought of and reaching your goal within a shorter amount of time.

With developers making $40-$60 an hour (or up to $100 for skilled project managers and niche professionals), you want to know you’re getting the best deal for your money. Typical workdays are ten hours long and workweek starts Sunday and ends Thursday so you may have to adjust expectations of when people are available.

There is a choice between using individuals (Elance has recently launched in Israel), small boutique companies of twenty or less, and larger companies. Large international entities have also discovered Israel, with companies employing hundreds of technology professionals.

For that reason, the IT infrastructure is excellent and improving all the time. English is widely spoken, so communication will rarely be a problem and the latest technologies and tools are always available.

If you are a Chief Technology Officer considering staffing your venture with telnets, Israel has a big advantage especially when it comes to finding solutions to complex problems fast. A CTO job’s in this perspective is to know how to balance between highly knowledgeable and skilled workers, who can lead a team of developers, and those developers. Having too many “leaders” on board may sometimes be a problem. You need a clear path of communication and accountability.

Disadvantage in outsourcing to Israel? Cost. You will pay for experience, skill and potential. That can also be looked at as an advantage – if you want to staff your start-up with creative, out of the box thinkers, this is where you want to start looking.

Stability? Turbulence in the Middle East is always a concern but as big name companies like Intel have successfully run several highly productive and efficient FABs for the last 30 years, you can be assured that individuals as well as big companies are used to functioning and producing in every situation they encounter – which can also be considered to be an advantage.

Outsourcing to Israel

Outsourcing to Israel


About David Rashty

David Rashty, an entrepreneur and one of the early web pioneers, has over twenty years’ experience as a CTO and a CEO. David is the funder and CEO of CreativeMinds which focus on WordPress and Magento products.

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