Israel: Workforce Diversity is the Key to Building an Innovative Society

This article is sponsored by Maala and went through our normal editorial review process. 

Israel is home to more than 15 different cultures, each with their own distinctive traditions and ancestral backgrounds. Although Israel is often characterized as the world’s only Jewish state, diversity is, and always has been at the heart of its identity as a nation.

Nowhere is that pluralism more evident than in the workforce that secures Israel’s technological edge. Arab Israelis fill an increasing role in today’s workforce as do new immigrants and communities that have been an integral part of Israeli society for decades, but whose members have traditionally not participated in white- or blue-collar jobs – until now.

But the path to increasing Israel’s workforce diversity hasn’t been easy, said Dr. Sigal Shelach, an authority on migration and employment in the Israeli workforce. Shelach currently serves as the senior deputy director of Israel’s Joint Distribution Committee (JDC-Israel) and CEO of its unique employment initiative, Tevet. In August she will assume the role of director general for JDC-Israel; an appointment that in itself reflects JDC's commitment to diversity. Shelach will be the first woman in history to head up the organization.

Shelach said that while Israel’s national unemployment rate is fairly low (3.7 percent, 2018), the country still faces unique gaps in its employment sector often not seen in other western nations.

“[There] is a big divide in the Israeli labor market,” said Shelach. While the broader employment sector will face challenges brought on by increased automation, the use of artificial intelligence and the increasing demand for upskilling in the coming decades, other communities that are only now entering the workforce face even more compelling demands for training, support and integration.

“[There are] at least two different societies that behave differently in the labor market than the rest of the jobs. One is the ultra-orthodox in Israel, in which the labor force participation for most of the men is very low,” Shelach explained. Haredi men are often encouraged by their families to focus on their religious faith rather than prepare for a secular career and therefore often lack the education and experience that they would need in a manufacturing or tech job. Haredi women, who are often the main bread-winners, face their own challenges, with few well-paying job opportunities.

Another group that faces challenges in the labor market is Israel’s Arab community, which until recently, has often shied away from employment in tech and manufacturing markets.

Israel’s Ethiopian Jewish community is seen by some as proof that Israel’s approach to diversity is actually working. Employment levels continue to rise for immigrants hailing from eastern Africa’s remote Jewish enclaves. But with the numbers of immigrants from Addis Ababa and Gondar, Ethiopia still expected to rise, the effort to integrate largely untrained new arrivals into the workforce continues.

Each community of workers faces its own exceptional challenges, said Shelach. And it’s been Tevet’s partnership with employers and the realization that a diverse workforce brings diverse thought and can actually promote innovation, that is helping to overcome those challenges.

These efforts are working. According to the Maala Index, between the years 2006 – 2017, rates of diversity and inclusion within the business sector in Israel have risen steadily. The number of women in managerial positions has risen from 20 percent to 30 percent, while the number of women in directorial positions has risen from 17 percent to 23 percent. Among the rated companies, the percentage of Israeli Arabs in the workforce has doubled from 2.4 percent to 5 percent, and the percentage of people with disabilities in the workforce has risen from 0.5 percent to 2 percent. However, despite these positive trends, there is still a way to go.

Osem-Nestle: Building new pathways to employment

Osem-Nestle is one of Israel’s largest food manufacturers, with more than a half-dozen factories spread across the country. In 2015, the company was selected to join a public-private partnership directed at increasing Arab participation in the national workforce.

According to Ofira Goldwasser, who serves as Osem-Nestle Group’s corporate responsibility manager  as well as an assistant to the company’s chairman and CEO, the goal of the Collective Impact Program was to first answer a question: Why was Israeli-Arab participation in Israeli business sector so low?

“The candidate research results [revealed] that 50 percent [of applicants] had never applied for a job in the Israeli business sector from the Arab community,” said Goldwasser.

Yet there was also high employment potential. Roughly 70,000 young individuals in the Arab community would eventually need work. And Osem-Nestle needed workers it could train and then upskill to meet the increasing demand. It was easy to see a business case for getting involved in the Collective Impact initiative, Goldwasser said.

“The traditional industry in Israel is facing some challenges,” particularly when it comes to filling blue- and white-collar positions, she said. “So the business case was that we need employees and we need talent in order to grow and develop.”

In 2015, the Benjamin Netanyahu government increased government funding to address those gaps. In addition to providing more funding for housing and education in Arab communities, the new budget provided financial incentive for employers to increase their outreach, training and employment of Arab workers. Programs like the Excelling Arab Localities built new pathways for increasing services in Israel’s broadly scattered Arab neighborhoods.

But expanding its employment rolls also meant making some adjustment to the way hiring and training was carried out. “For example the Arab community needed to build some trust and to have some belief that if they were to apply to the business sector for example, they have a chance to get in,” Goldwasser explained.

To facilitate this, the company made adjustments to the application process and took into account that the candidates were coming from different cultural backgrounds with different language capabilities than say, applicants who spoke Hebrew as a first language.

Goldwasser said being sensitive to these barriers was important. But it didn’t mean the company was establishing different performance criteria.

“Because we are not making compromises. This is really important to understand. Being more open to our employees doesn’t mean that we are making compromises with the people we choose.”

Still, Osem-Nestle’s participation in the Collective Impact initiative has allowed it to expand diversity in its managerial ranks as well.

“[We] are successfully reaching talented Arab managers [from the community], and this has really created a more interesting organization.” She said by increasing the diversity at all levels of the company, Osem-Nestle has been able to encourage more innovation.

“[You] mix different cultures, you make different opinions, you have different ideas and it [becomes] a very good platform for innovation and for the growth of the organization,” said Goldwasser.

Unilever - Connected 4 Growth in Israel

In 2016, Unilever launched its Connected 4 Growth campaign. Designed to reach all 400 of its brands across the world, the program was meant to “create an organization that is faster, more agile and more competitive.”

For Unilever Israel, said Liat Lavee, Unilever Israel’s Communication, External Affairs and Sustainable Business Development Manager, that goal translated to making its employees digital-savvy.

In a country that has widely been touted as the world’s “Start-up Nation,” equipping employees with the tools to allow them to use social media and automated services both at home and at work was a practical choice, said Lavee.

“Basically the world around us is really changing at incredible speeds. Digitalization [is] impacting everything: How we work, how we live, how we play, and there really is a [need] for digitalization wherever we look.

“But what we also realized at Unilever Israel, is that the base of this change creates growing gaps between those who move with them and those that don’t keep up with the pace. It increases the social inequality and may also limit employment and promotion of those people who stay behind.”

To address this inequity, it launched company-wide trainings. It invited banking representatives to give workshops on how to bank online; it offered lessons on social media.

And it educated its managers on the importance of being sensitive to those workers who were insecure or complained they were “too old to learn these things.”

Lavee said the process is ongoing, but so far the results have been very favorable.

“There is an increased willingness to experiment and that is exactly what we wanted,” said Lavee. Surveys show that employees are more engaged and willing to take risks.

“At the end of the day, this is what we have learned: Digital is not a goal. It is a tool. And we really need to see the people themselves in the organization and understand what’s driving them, what drives them in their work, what drives them in life, and help them navigate the paths in which gives them satisfaction and development and gives them added value. And then that actually creates the win-win for the business as well.

“I think that is one good lesson that we have learned here in Israel.”

Unilever Israel’s digital training dovetails with another diversity project it had undertaken, which was to encourage a local Haredi community to help fill positions in a nearby factory.

To encourage candidates, the recruitment team reached out to community leaders. They met with rabbis, visited synagogues and made direct appeals to the community. And they listened to what cultural and social factors would best ensure retention of employees.

“What the team needed to do was think differently and act differently to connect with the ultra-Orthodox community that lives there. They approached them in a completely different way than you would in recruiting people normally,” by collaborating with the community in a way that encouraged participation.

Harnessing diversity is a collective effort

From Shelach’s perspective, it’s partnership that makes Israel’s focus on a diverse, multicultural workforce a success.

“We have to look at it from the standpoint that it is not only the responsibility of the employer … the individuals themselves, [or] the government,” said Shelach. The three, along with local unions play a role in ensuring a growing and diverse workplace.

For many businesses in Israel, diversity is a key component to success. Almost 10 years ago we initiated the Forum for Diversity Hiring in Israel,” said Shelach. “Today there are over 100 members who are the biggest businesses in Israel that are part of this forum.” ‘

Organizations like Maala, which hosts the Maala Con[Fair]ence each year are also behind these efforts. As companies like Unilever, Osem-Nestle, El Al Airlines and others have discovered, a diverse workforce is key to ensuring an innovative and market-ready business.

Images: Courtesy of JDC-Tevet/ Jonathan A. Stone