Israel Business Management

So, I have started a new job, which has left me less time for blogging. I will not let this die, but I will not be able to post with the same frequency, at least for the next few weeks.

Going through the onboarding process in a new company (HR, training, meeting new people, learning new processes, etc.) gives some new thoughts to posts for the future.

I love learning new things - whether products, companies or meeting new people. It gives a new frame of reference to the experience and thoughts that I have had up until now.

The new experiences together with my history and previous endeavors will lead to more posts about my thoughts on the business world, in general, and the Israeli hi-tech market, specifically.

I can share this to those that are looking for a job in today's tough climate - there are jobs out there. Remember, that you are selling a product - you. The customer is the company that you are interested in joining. You need to be diligent in learning all you can about them, so you understand their needs and how you, the product, can help them meet those needs.

More details to come on the new job, but I am not yet ready to share all the wonderful details.

Last week, Tadiran announced its intention to move its manufacturing out of Israel to China or somewhere else in the Far East. The days of cheap labor in Israel are officially over.

Companies are looking for methods to survive the economic downturn and the laws that are on the books and the ones that have been proposed make it hard for companies to justify continuing to have labor intensive jobs done in Israel.

The local goverment and the cheap labor markets have made the decision easy for any manager.

So, what can be done?

The Knesset, first, needs to admit that there is a problem. Until that happens, there will be no resolution.

Once that takes place, the government can give tax breaks to companies that bring jobs back to the local market, like the repatriation tax break that was passed in 2004. This may jumpstart the local job market, by increasing the amount of jobs that are available today. A company may now see some cost benefit, due to the tax incentive.

The Ministry of Trade and Industry can start a "Buy Blue and White" campaign to promote goods that are made by local labor to Israelis.

The government can pass incentives or law to only allow government procurement from Blue and White companies.

Would you buy Blue and White, even if it costs a little bit more?

Let me know your answer and any other ideas you have of how to insource more jobs to Israel.

The dollar has dropped significantly against the shekel in the past few months from over 4 shekels to the dolar down to 3.8 currently.

What does this mean? It means that when Israelis go to the US to do shopping, they now have more buying power as their shekel has gained strength against the dollar (and US goods are all priced in dollars). It means Israelis can afford to travel more as the prices of most airlines are in dollars (except for El Al Airlines) and the prices have actually dropped as the shekel got stronger.

But is it all rosy?

The answer is clearly no.

When the dollar drops, one of Israelis biggest industries, tourism, takes a hit. Because the American visting Israel is only getting 3.8 shekels for every dollar he changes, he can buy less than he could last year when the dollar was over 4 shekels.

So, the tourists may choose to go elsewhere, where the local currency is not as strong against the dollar. Or, they may just choose to stay at home.

Companies with their headquarters in Israel, but have sales offices in the US, also suffer. Last year when they sold their goods and then changed the dollars into shekels to pay their expenses here in Israel, the dollar went further than ot does today. So, a company has to sell more in dollars today to make up for the difference in the exchange rate. All because the expenses in Israeli are paid in shekels.

Exporters have been hit hard as they also have the same costs they had before, but get less when they trade in the dollars.

So, as the government struggles with what to do to help the local economy, those Israelis looking to travel to the US, should have more fun shopping, knowing that they can buy more stuff this year than last.