Why Hiring Palestinians

They are good, committed, hard workers, their English is good. they can come to my office anytime I like with no overseas travelling cost and no entertainment cost. They start the week with me, on Sunday. The turnover rate is lower than elsewhere, they have a sense of responsibility to the code they write for me.

This is the typical answer I get when I ask people in Israel why they choose to work with Palestinians. Cisco is doing it for 10 years now, they started with a team in Israel who needed augmentation and it spread to engineering groups in the US and India. Mellanox are doing it for about 9 years already, Nuvoton 13 years or more, Microsoft almost 10 years, Nokia, Western Digital, Cadence, startups like Cloudify, Earlisense and others started working with Palestinians in the past few years. All of those companies are not only highly technological with very reputed development capabilities they also have experience working in other outsourcing places, places that can supply 100 times more people than the Palestinians (e.g., India), yet they bother and choose to work also with Palestinians, so does this teach us anything? 

Well, it does. There are places where the turnover rate is high, this is very expensive, it cost training time, it cost ramp up time.  Other places are reputed for individual developers who open a kind of an Italian strike when they want to raise their compensation for example, they won’t tell you a thing, it takes weeks to realise what the problem is and then to resolve it, it cost a lot of money. Some complains about the English, either unsatisfactory level or hard to understand accent. The Palestinian do not suffer from any of the above. You can find extraordinary Palestinian developers “I would replace half of my staff with this Palestinian Developer” told me once a colleague in Cisco, pointing at a Palestinian woman developer. “I wish my board would let me work with Palestinians, I had enough headache with my Eastern European team” told me a friend, VP R&D in a late stage startup.

“We built a team from scratch, it took us years to teach them the technology and nurse them closely, now, they accept new members to the team and bring them to speed in a record time, there is no chance I will give up this Palestinian team, the investment was worthwhile”  said a CEO of another company who needs a very sophisticated technology.

Those who take the leap of faith and work with Palestinians enjoy the benefits of this emerging outsourcing place.

Business Engagement with Palestinian Company

For an Israeli company to work with Palestinian vendor, there are some issues to take care of:

  1. Selecting the right vendor
  2. Prepare the right contract
  3. Payments to the Palestinian Vendor
  4. Permits to enter Israel for the Palestinian Engineers
None of the above are trivial to those who are not familiar working with Palestinians, I will try to put them in context here: 

Selecting the right vendor

In order to do it right, you need a list of the available providers, look for references and run some vetting processes. Working with Palestinian companies is not yet wide spread knowledge so many find themselves clueless and don’t know how to even start the process, or whom can they trust to turn to with questions.

tip: You can start your search by visiting the sight of the Palestinian ICT Assoc. of Companies (PITA) brows their member companies and through their client list find a client you know and get reference from. You can also drop me a note and I’ll be happy to share some our knowledge base.

Prepare the right contract

The majority of the legal consultants in Israel do not have any experience working with Palestinian vendors, you can check your company lawyer about that, you most likely get this answer: “I can check for you, but I have no experience doing that”.

tip: Ensure that an expert reviews your contract, make sure that disputes are dealt with in the Israeli system by the Israeli law.

Payment to the Palestinian Vendor

This is tricky, you won’t find the Palestinian banks listed in the internet services for transfers in the Israeli banks. The banks are not that easy with their process of transferring money to the Palestinian Territory. You need also to get a special invoice called Makassa from the Palestinians, and you have to send the original copy of the Makessa to a special department in the treasury. The international companies use international accounts for those payments in many cases.

tip: Start by talking to your bank rep. ask them to investigate what is their procedure and what papers do you need to prepare from the treasury in advance (e.g. waiver of tax deduction). Insist that you know that the process is not like transfer to any other country. Be prepared that you might get directions but it will be fine tuned on the fly. 

Using checks is not recommended as almost automatically your bank will decline the check when your vendor will try to cash it.

Permit to enter Israel for the Palestinian Engineers

There is a special department in the Civil Administration who deals with Permits, some of the Palestinian companies take care of this for their employees, you will need from time to time to help by issuing a Request Letter.  But it is also likely that you’ll need to take care of the requests yourself. The Palestinian engineers who are asking for permit have to get their “magnetic cards” first, this is a kind of an ID card issued by the Civil Administration.

tip: The Civil Admin department asks that you submit a request for a permit 10 days in advance. Contact them first to get the forms for the request, follow their instructions about the format of your mail and its content very carefully, any deviation will cause a discard of your request. Once submitted, wait 24 hours to get an auto respond to your mail, call them if you didn’t. Then call again a day before your requested date to ensure it’s in process, most likely that they will issue the permit in the last moment. Make sure in advance that your Palestinian employee holds a valid Magnetic Card, get their ID# and their personal phone number.

The Resolution

GeoFree Software is the first of its kind company, aims to resolves those issues. 

We take care of all of the “headache” I mention above, GeoFree Software offers you this:

  • GeoFree Software is an Israeli entity. The company is registered in Israel. So the business engagement (contract) is with an Israeli company. Your contract is with us, we’re responsible for the delivery.
  • Selecting the vendor: We’re specialised in the Palestinian High Tech industry, strength and weaknesses of each,  we’re constantly updated with trends and changes, we know how to find the best vendors, who are their key personnel and their reputation.
  • Permits: We’re taking care of the permits to our personnel. We also know and are known to the Civil Administration. We’re familiar with the trends and policy updates in the Civil Administration regarding to permits-for and employments-of Palestinians.
  • Payments: Your transactions are with GeoFree Software – an Israeli company.
  • We offer one more invaluable asset, decades of experience in Software Development in the Israeli and International market, we make sure to find the right personnel that can live up to your standards and speak your language. We’re responsible for the delivery.
  • And… we’re local, we speak your language,  celebrate the same holidays and vote in the same elections….

The High Tech in the Palestinian Territory

“We’re small country with very limited natural resources so our most important resource is our people” Sounds familiar to the Israeli ears ? This “mantra” is repeatedly said by Palestinians too.

In the Palestinian Teritory, as well as in the rest of the world, the economical leadership understands that the High Tech is a powerful engine for the local economy, there is ever growing demand for professionals and Software development in the world, and in different from traditional industry, it has no boundaries. With this said, there is no limitation to do software development anywhere in the world, as long as you have connectivity. And connectivity exists in the Palestinian Territory so the basic infrastructure lays to their feet.

For a full High Tech scene you need more than that, you need the whole ecosystem, from good professional schools, through infrastructure to monetary support system, know how and much more. 

The High Tech Echo System in the Palestinian Territory is evolving in the past decade and beyond, from software companies here and there through an establishment of an association of Software companies to enhance the power of the sector:  PITA (Palestinian IT Association of companies), National Incubator:  PICTI (Palestinian ICT Incubator), to  Venture Capital funds, Startups, Hubs, activities such as Startup Weekends and more.

The education system is evolving too although it struggles being open to the western world (not many American or European professors would come to do a Sabbatical in a Palestinian university (yet there are some)).

More than 250 companies are registered to the association to date.  Articles about the Palestinian High Tech are published from time to time, such as Palestinian tech startups offer hope to struggling economy, or Palestinian High-tech Workers Plugging Shortage of Israeli Tech Staff/Haaretz. It provide a glimpse to what is going on in this “unexpected” place.

The geographic distribution of the High Tech in the Palestinian Territory looks like this: the majority of the companies are located in Ramallah (e.g., Exalt, Progineer), fewer can be found in Hebron area (e.g., Orcas), Nablus (e.g., Radix Technologies) and now there are few in Rawabi (e.g., Asal Technologies), the new City north to Ramallah, and, surprise surprise, there are also software companies in Gaza (e.g., UnitOne).

Some of the companies are doing outsourcing, the larger ones are working with Israeli companies or Israeli branches of international companies, some are working with companies in the EU (e.g., Siemens) or USA (e.g., PDF Solutions, Cisco). Others have local clients or clients in the Gulf area. There is also a new trend of US companies that open branches in the West Bank, companies like Xngage, Harri, and Founder Therapy.

As for Startups that develops products and technologies, AngelList have 43 registered Palestinian startups, Calcalist newspaper mention 241 startups in an article from July 2018, Beside of PICTI you’ll find other incubators, here is a list from September 2015. As for funding, there are some niche VC funds focusing on early stage technology Startups, Sadara, Ibtikar and few others.

So yes, in case you wonder, there is a live and kicking High Tech scene in the Palestinian Territory. It has yet where to evolve to but it is in quite an advance stage, exactly the stage where it can provide benefit to their economy as well as to others.

Nearshore in Israel

Nearshore in Israel ? How come ? We know very well that the surrounding countries that Israel have some kind of normal relationship with are not outsourcing locations, the closest countries for outsourcing are located in Eastern Europe.

But under the radar there is an untapped area: the West Bank. Nearshore it is, 45 minutes away from Tel Aviv. The cost of professionals in the WB is not near their cost in Israel, it competes well with the prices of Eastern Europe, as well as SE Asia.

Cisco Israel’s R&D started outsourcing Software to the West Bank bank in 2009 (I was fortunate to be chosen to manage this operation) and other international companies follow suit, including Microsoft, Intel, Mellanox, Nokia and more. However, this is not yet common knowledge.

Outsourcing software development to the Palestinian Authority? you ask, it brings a lot of questions in mind, isn’t this problematic due to the political instability? the violence in this region ? Is the WB infrastructure developed enough to accommodate outsourcing ? Are they good ? 

All are legitimate questions, and there are many more…

So ten years of experience working with Palestinians taught me many things, I am happy to share some with you. 

Lets start with the stability and political climate issues, how do they effect the work. Since starting to work with the West Bank, there were several armed activities in Gaza, terror attacks, diplomat and political issues. None of which had ever effect the work together. No one brings political talks into the work as people understand how much they can loose if these things will seep in. Those turbulences makes the need for stability at work much clearer.

As for infrastructure, Broadband internet is available throughout the West Bank, offices in the main cities are well connected and so are the homes of the sophisticated young people.  60.6% of the homes are connected to the internet in the West Bank, 31.6% have laptops, 89.8% hold smart phones (The Palestinian Bureau of Statistics, 2017 report). So software developers can take their job home and continue where they drop the pen at work.

The High Tech in the Palestinian Authority is growing, more and more young people see how well it works for Israel economy and they want to bring it home, so more and more young people choose to study related studies, if we knew about roughly 2,000 graduates every year in those subjects in the early 2010th, there are talks about 3,000 or even 3,500 graduates these days.

Here are some figures by the Palestinian Bureau of Statistics for 2017, these numbers are for the entire Palestinian Authority, West Bank and Gaza:

  • Number of R&D Personnel: 8,715
  • Number of R&D Personnel with Full Time Equivalent (FTE): 5,162
  • Total Expenditure on R&D: $61.4 M (USD)
  • ICT contribution to the Palestinian GDP (2016) $542.1 M (USD) (4% of the total GDP)

Are they good? you ask, well, like everywhere else, you can find the whole range there, good and bad and everything in between. Some have studied in local universities, some overseas (US, EU, Jordan, Lebanon). There English varies from good to decent. As time goes by you find more and more people with experience working for international companies so they get more familiar with the High Tech culture.

How about traveling to Israel, can they come to my office to Tel Aviv ? The answer to this is yes, they can come to Israel. They need permits which they get from the Israeli Defence Ministry, there are permits for the High Tech Sector employees (as well as for other professions) those permits usually allow them to enter Israel from 5am to 10pm on a daily basis. Permits are provided for multiple entries for a period of time, usually 6 months.

Would you like to visit their office in the West Bank ? their offices are in what we call Area-A (total autonomy of the Palestinian Authority), for that, if you’re a Jewish Israeli citizen you’ll need an approval from the Defence Ministry (Arabs are exempt), If you’re not an Israeli citizen check your country policy.

Working culture, they try harder… truly, they are underdog at this time, and feel like needed to prove themselves. They are not fast to leave their job, especially if they feel well compensated and challenged in their work. They will work late at night and will hold phone/video conferences when needed.

Wrap up, I have experience working with many engineers around the world, I found it very convenient to work with Palestinians. As an Israeli I also found that Palestinians are, in many aspects similar to me, body language, gestures, and some other similar things.  I also find it very convenient that their working week is Sunday to Thursday, so there is no one day shift as with the rest of the world.