A postcard from... Israel

Our 'postcard from' series keeps you updated on key HR areas in different countries

Economic briefing

The state of Israel was established in 1948, marking its 70th anniversary this year but also the start of ongoing conflict between the nation and Palestine. Despite this hostility between the neighbouring countries, the Israeli economy has strengthened and transformed over the past 25 years. It is now known as a ‘start-up nation’ thanks to its growth in the high-tech and biotech sectors, meaning it has become a technologically-advanced free market economy.


The nation has a population of eight million, of which 74.7% are Jewish. The majority of people are concentrated in and around Tel Aviv and the Sea of Galilee. According to Etan Bernstein, managing partner – people advisory at AKT Human Capital Solutions, based in Israel, unemployment is at an all-time low. “Since the beginning of the millennium the participation in the workforce of social sectors such as Orthodox Jewish women and Arab men has increased dramatically, creating a more diverse working environment. The increased level of education and the rise of the retirement age have also contributed to this trend,” he explains.

Legal lowdown

Israel has extensive legislation protecting employee rights. However controversy exists around the Hours of Work and Rest Law, which many believe needs updating, especially with regards to overtime. Meanwhile, military conscription exists for all Israeli citizens – male and female – over the age of 18 who are Jewish or Druze (an Arabic-speaking ethnoreligious group).

From the HR frontline

“Unpredictable events in the Middle East, such as violent outbursts, have a tremendous impact on the ability to operate and grow business,” says Bernstein, adding that this has fuelled companies to become more agile, risk-averse and resilient to help weather such events.

He explains that there is very much an “informal workplace culture” where “people communicate very directly, with no filtering because of the hierarchical seniority of another”. Leadership has always been a priority and highly developed, in part thanks to the country’s army practices, says Bernstein. The social side of work is also important, with innovation and independence valued more highly than structure and process in the workplace.