If you only read the headlines, you might think the Israeli high-tech industry is in crisis. Layoffs, fewer junior hires, companies recruiting abroad, and longer hiring processes all paint a concerning picture. But a deeper look at the data reveals a very different reality: the market is not shrinking-it is undergoing the most significant transformation since the cloud computing and digital transformation revolution, only this time the change is happening much faster and on a much larger scale.
Aman Group’s annual report, based on the analysis of approximately 440 open positions across 200 organizations and companies, indicates that we are in the midst of one of the most important turning points the Israeli technology labor market has experienced in the past decade.
The dollar has become a major player in the talent market
One of the most notable trends we are seeing is a more than 23% increase in demand for hiring outside Israel during the first half of 2026. The reason is not solely a shortage of local talent or global expansion. For many Israeli startups, the primary driver is economic.
Most technology companies and startups in Israel raised their funding in U.S. dollars or euros. When the Israeli shekel strengthens and the dollar weakens, these companies are affected twice. On one hand, the capital they raised is worth less when converted into shekels. On the other hand, salary costs in Israel remain among the highest in the world compared to competing markets.
As a result, more companies are establishing development, data and support teams outside Israel. The four leading destinations for Israeli companies today are Romania, Poland, Serbia and Portugal, which offer a combination of highly skilled talent, strong availability, and significantly lower employment costs.
For Israel, the implication is clear: if the country wants to maintain its competitive advantage, it cannot rely solely on the quality of its workforce. It must also create a more competitive business environment for technology companies.
The market has shifted from employee-driven to employer-driven
Three or four years ago, candidates often managed multiple recruitment processes simultaneously, received offers quickly, and sometimes even secured counteroffers before informing their managers they intended to leave. The reality in 2026 is very different.
The average hiring cycle for a technology position has increased from roughly 30 days two years ago to between 45 and 60 days today.
At first glance, one might expect hiring processes to become shorter when there are more candidates available. In practice, the opposite is happening. Organizations are no longer looking for "another pair of hands." They are looking for employees who can generate greater business value.
Hiring managers now evaluate not only professional experience but also the ability to work with AI tools, learn independently, understand business objectives, and adapt quickly to changing environments. In other words, there may be more candidates, but there are fewer candidates who precisely match what organizations need.
Which roles are seeing growing demand?
Contrary to public perception, demand for technology professionals has not disappeared. The hottest fields today are Data and AI, Cloud, DevOps, Cybersecurity, Integration and CRM.
Among the most sought-after positions are Data Engineers, AI Developers, Machine Learning specialists, Architects, Cloud experts, and Cybersecurity professionals.
Not surprisingly, the three hardest positions to fill today are Prompt Engineers, Data Engineers and AI Developers.
What these roles have in common is that they sit at the intersection of technology, data and artificial intelligence, the areas where organizations currently generate the greatest business value.
What about salaries?
This may be the biggest surprise of the year. Despite growing demand for AI-related roles and an ongoing shortage of experienced specialists, salaries have not surged. In fact, the market has not experienced a significant broad-based salary increase over the past two years.
The reasons are straightforward:
• Layoffs have increased the available talent pool.
• Organizations are focused on efficiency and cost optimization.
• Many professionals have undergone AI-related reskilling and training.
• Companies increasingly prefer to upskill existing employees rather than recruit new ones
There are salary increases of approximately 15% for professionals with proven expertise in Data and AI. However, these increases represent a targeted premium rather than a market-wide shift.
The key question is no longer how many years of experience a candidate has. It is how relevant their skills are to the new world of work.
The biggest challenge for employees
The most important takeaway for employees and job seekers is that seniority alone is no longer enough. Demand for junior professionals is declining. Manual QA roles continue to erode. Traditional software development positions that do not incorporate AI or data-related capabilities are gradually becoming less attractive.
The message to employees is clear: those who continue learning and adapting will find plenty of opportunities. Those who rely solely on knowledge acquired five years ago may discover that the market has moved on without them. For the first time in years, the ability to learn is becoming just as important as experience itself.
The challenge facing employers
Employers are also facing a paradox. On one hand, there has never been a larger pool of available candidates. On the other hand, it has never been harder to find the right people.
Companies that continue searching for the "perfect candidate" risk prolonging hiring processes and missing business opportunities. In contrast, organizations that invest in upskilling existing employees, knowledge management, and building internal AI capabilities will gain a significant competitive advantage.
The bottom line
The story of 2026 is a story about a fundamental shift in how value is defined - for employees, employers and professions alike.
Fewer mass hiring campaigns. More specialization. Less emphasis on tenure. Greater emphasis on learning agility. Less distinction between traditional development roles and AI-focused positions. Greater expectation that every technology professional can operate effectively in an AI-driven environment.
The companies that recognize this shift first—and the professionals who adapt to it fastest—will be the ones shaping the technology workforce of the years ahead.
Sarit Assulin is offshore division manager at Aman Group