Here in Israel, Global Businesses Are Grabbing Talent in a Huge Wave of Investment

Darwin would be fascinated by this place, a land that makes the term “survival of the fittest” too cliche to say. This is the last frontier for Arabs who arrived because in their home countries they were in danger for being gay, for Jews who left Iran a quarter-century ago, and for Ethiopians who have made such death-defying escapes, sometimes on foot, from Africa that their stories read like those Hollywood movies that make you sarcastically say, “Yeah, right.” Immigration here from the Stalinesque dictatorship of Belarus is up sharply. The immigrants are coming to Israel to raise families, sell falafel, plant fruit, design clothing, and drive buses — though in this country, the latter is no run-of-the-mill job.

But it is the small Israeli tech sector that is influential in ways that defy economic gravity, running America on its inventions like voicemail, instant messages, Microsoft operating systems, and Centrinos, as well as ingestible medical cameras that fit inside pills. On the highways here, you see some familiar names that have either set up R&D centers or bought Israeli startups: the Agilents, the Ciscos, the Qualcomms. One billboard advertises a new Oracle project melding HR software from PeopleSoft and Oracle. Google is expanding here too ó partly, it says, because there are so many talented software engineers. Intel is investing $3 to $4 billion in a new Israeli chip plant.

This country is not rich, and nor are most of its people. Actually, it’s tough to find anyone here who appears unusually wealthy. But Google’s recruiters will find a highly educated, highly literate workforce in a politically stable democracy. And, says TheStreet columnist James Altucher, “Despite what you’ve heard in the media, Israel is an extremely safe country.” Danny Yamin, Microsoft Israel’s chief executive, tells me that “over the last two years there has been a huge wave of investment” from venture capitalists around the world and from global high-tech companies doing research here. Companies that specialize in screening and testing potential and current employees are particularly hot.

One of these companies, Redmatch, sells recruiting technology to corporations, staffing firms, and media outlets such as newspapers. Redmatch, among other things, says it hopes to “make the endless stream of resumes disappear” ó well, at least the ones you don’t want. Candidates build profiles based on their skills and experience, such as “10 years running a magazine,” and receive listings of jobs that fit the bill. The reverse happens for employers; they can indicate that, rather than seeing resumes from every candidate who wants their job, they only want to receive job applications, for example, from candidates who have 10 years’ magazine experience and have led a team of at least five people.

Redmatch began by selling mainly to newspapers, and CEO Gal Almog says he has about 650 newspaper clients. He hopes to have 2,000 papers signed on within a year. But he has turned the company into a full-blown applicant tracking system provider. Almog’s telling prospective clients that his product can be customized far more quickly than those of the other applicant tracking companies, and he has recently beat out some big-name American applicant-tracking companies for contracts. Redmatch has signed on Ohio Savings Bank, the publishing company Lee Enterprises, and now boasts 150 corporate clients. Vertical search sites like Oodle and SimplyHired are calling Almog, wanting to partner with him. Between 2004 and 2005, Redmatch revenues jumped 80 percent.

Another firm, HRVision, helps companies around the world select employees. It’s wrapping up a new round of venture capital funding. The directions HRVision gives to its office aren’t those of the typical assessment vendor: “Take the first left toward the Dead Sea.” Its location is actually uniquely Israeli: a high-tech business park near 2,000-year-old catacombs. HRVision has more than 100 clients in Holland, Mexico, Brazil, and elsewhere. At about 100 euros per candidate, it builds profiles of a company’s top performers, and then develops an assessment of job candidates based on those profiles. The company says that because high performers are used as a benchmark, its tests correlate far more closely to job performance than do interviews or most other tests. The tests have four parts: personality, intelligence, integrity, and a fourth which examines the way someone works, such as how they handle stress or how they work with distractions in the background. Kimberly-Clark used the tests to discover that although its forklift drivers shouldn’t be dummies, they shouldn’t be so smart that they spend all day thinking, “I got better things to do than drive this thing around.” A large beverage company used it to better select drivers who aren’t accident prone. Manpower has used HRVision’s tests in recruiting recruiters.

Speaking of Manpower: A few years’ back, two of its executives heard about an Israeli employee screening and assessment company called CareerHarmony. Manpower bought some of CareerHarmony in 2000 and now owns most it. Manpower has a CEO, Stuart Marvin, running the Israeli company out of Geneva. CareerHarmony’s aptitude tests, job simulations, skills tests, and personality tests are used in 14 different languages by companies like FedEx, Wal-Mart, and Singapore Airlines. A giddy Marvin says he has landed a “very, very exciting contract in China,” helping the Shanghai government test people for entrepreneurial skills in order to help decide who gets tax breaks. Marvin hopes to upsell and expand the Shanghai contract. As to how this tiny Israeli company ended up screening more than a half-million employees annually, Marvin points to the intelligence, education level, and technical skills of Israelis, as well as something less tangible. “Their desire to be successful is fabulous,” he says. “My experience in working with the Israelis is second to none.”

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CareerHarmony has its roots in knowledge gained from testing people in the Israeli army. That such a powerful military is still needed is a source of frustration for Israelis. When their babies are born, the parents or a midwife often prays that they won’t have to go into the military — but knows the likelihood they will is high. Heavy military spending is not Israel’s only challenge. Despite pro-growth policies implemented by former Finance Minister Benjamin Netanyahu, the government owns too much of the Israeli economy. Job-hopping is popular. Inflation is up, as is the gap between rich and poor. Like in America, politicians are often distrusted. Israel also seems incompetent at public relations; a slew of American groups have been founded to complain about the stream of inaccurate stories about the country in the European and American media.

Although HRVision’s Sandy Erez says that “Israelis consider themselves very much Europeans — they have much more in common with Europe,” she notes that “we are still in the Middle East and that does have an influence–but that is truly understating reality.” That the Middle East merely influences Israel is indeed an understatement. One influence is Persia. As noted by the author Edwin Black, this great nation became an outpost for the Gestapo last century, changed its name to Aryan, or Iran, and organized groups of Iranian Nazi volunteers to go to Bosnia and kill Jewish people there. Today, Iran’s spending about $100 million annually to support a paramilitary terrorist group called Hezbollah which has killed Americans, Europeans, and fires rockets at Israelis in the Har Dov neighborhood in Northern Israel. Yuval Diskin, who heads Israel’s security service, is expecting a “new and worrisome wave of terror” to be unleashed soon by Iran, working with local terrorist groups.

But even in a land this tiny, the Har Dov rockets seem far away. Elsewhere in Israel, M.L.L. Haifa is making human resources software; its clients include a division of Coca-Cola. Malam Group is selling employee attendance systems. Doran Communication is designing recruitment ads. Not far from HRVision, ViryaNet sells workforce technology to companies such as Lockheed Martin. The ViryaNet products are used in the field to take orders and schedule a technician based on the technician’s skill, location, and availability. ClickSoftware, a ViryaNet competitor, is also in the workforce planning and forecasting business, using algorithms originally designed for the Air Force.

Yes, work here and life here go on. Marvin, the CEO of CareerHarmony, says that when he flies from Geneva to Israel, as he does about every three weeks, he feels safer than in other cities “because the security is so good.” Besides, Darwin actually said that it’s not the fittest who survive; it’s those best at adapting. Yamin, the Microsoft Israel chief executive, says, “I think what happens is terror is part of our lives in this area, so we need to learn how to live with it and do all the things we need to do.” Or, as Almog, the CEO of Redmatch says, “Israelis tend to live for the day and not worry about tomorrow.”

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