Israel’s labor market is facing a real-time stress test. A prolonged security crisis, ongoing uncertainty, and thousands still mobilized for reserve duty are taking their toll on productivity and demand.
All of this unfolds against a backdrop of growing social, political, and national polarization. In this turbulent reality – with no clear emergency playbook – businesses are once again being challenged to remain operational and resilient while the ground beneath them shakes.
One thing is clear: Economic resilience in Israel’s business sector depends not only on contingency funds or insurance policies but also on the ability of employers to act strategically, inclusively, and with a deep connection to the diverse communities around them.
Diversity is an asset
This isn’t just about social justice – it’s about strategy. In times of crisis, organizations that have invested in building trust with diverse employees discover a powerful asset. That trust translates into flexibility, fast reorganization, reduced attrition, and operational continuity.
Employers who had broadened their recruitment pipelines now find themselves with access to talent pools that remain available and adaptable.
For Israeli employers, this is a moment of truth. This is not just “another challenging period.” It is a strategic test of organizational culture, leadership structure, and how seriously companies regard their human capital.
Those who invested in trust, diversity, and inclusion during routine times are now stronger, more agile, and less shaken. Those who didn’t are realizing how quickly the ground can give way.
To understand what’s truly needed from employers today, we must speak about responsibility – not legal, but strategic responsibility. Employers who fail to ask themselves, “Where is the Arab employee? The haredi (ultra-Orthodox)? The older worker with decades of experience? The Ethiopian-Israeli? The woman from the geographic periphery?” are missing the bigger picture. In a market plagued by chronic labor shortages, sidelining entire skilled populations is simply bad business.
A moment of opportunity
This is not theoretical. For example, Arab women make up approximately 66% of Arab students in Israel’s higher education system, yet their labor force participation rate stands at just 46%.
Arab citizens constitute about 14.2% of all academic degree recipients, many in science, technology, and practical fields. And yet, many of them are still blocked from employment that matches their qualifications. The potential is there – but access remains limited.
This is also a moment of opportunity. Critical labor shortages in key sectors – industry, technology, education, healthcare, and construction – extend beyond unskilled roles. There is a shortage of team leaders, safety supervisors, and tech instructors.
Many of these roles could be filled by talented candidates from the Arab community, if only the initial barriers of trust and unfamiliarity were addressed.
Employers must also look ahead. Israel’s Arab population is significantly younger than its Jewish population. According to the Central Bureau of Statistics, nearly one-quarter of Israelis aged 18–34 are Arab – and their numbers are growing steadily.
In a country facing an aging workforce, this is a major competitive advantage. Roughly 40% of Arab high school students are enrolled in technological tracks – precisely the fields where businesses have been struggling to recruit for years.
But in order to recruit from these pools, employers must be willing to change. It means breaking old habits, asking different questions, working with partners who understand the challenge – and above all, leading with responsibility, not fear.
Emergency situations are not a time to fall back on the familiar; they are a time to reimagine organizations that are more diverse, more stable, and made up of people who truly feel they belong, even when they come from different backgrounds.
In this time of crisis, organizational strength will not be measured by who has the biggest financial cushion – but by who built a foundation of trust, opened doors, and dared to confront complexity.
This is no longer about ideals. It is the only way to ensure continuity, retain talent, and build true business resilience.
The writer is vice president for employer engagement at Co-Impact.