Israel to increase reliance on foreign workers amid labor shortage

Israel seeks to bring thousands of foreign workers from India, Thailand and Sri Lanka to address a reported severe war-linked labor shortage in retail and food production sectors. Leading local supermarket brands like Carrefour Israel, Rami Levy and Shufersal are already relying on foreign workers from primarily Asian nations. Israeli food producers like Osem and Tnuva are also addressing the labor shortage by turning to foreign workers.

Israeli Economy Ministry Director-General Moti Gamish stressed that foreign workers play a crucial role in maintaining Israel’s economic growth. 

“The Economy Ministry considers foreign worker recruitment essential to maintaining Israel’s growth and productivity. Over the past year we have worked to expand quotas and bring thousands of new workers to Israel. Yet there is still a significant shortage across industries. We are streamlining recruitment processes and reviewing fees to ease the burden on employers. Our goal is clear: to ensure a stable, skilled workforce that allows Israeli businesses to continue growing and competing globally,” Gamish stated. 

However, some businesses also recruit in accordance with policies of their respective global parent companies. 

“We want to meet each candidate to ensure they fit our needs and can meet Carrefour’s expectations, especially in the fresh produce departments,” Carrefour Israel CEO Michael Luboshitz explained. “By training them in their home country, they can integrate immediately upon arrival."

The leading Israeli business news outlet Calcalist reported that the government in Jerusalem has greenlighted over 26,000 foreign workers to supermarkets and other service sector businesses. 

In April 2024, the Israeli government signaled an increased willingness to recruit workers from India to replace Arabic-speaking workers from Judea and Samaria (West Bank) that have traditionally filled many of Israel’s labor-intensive sectors such as construction. Due to the war and the deteriorating security situation, Israel has tried to reduce its reliance on workers from the West Bank. Furthermore, Israel and India enjoy close relations, and the move is seen as mutually beneficial as it enables Indian workers to earn more competitive wages in the Israeli economy. 

Indian workers are increasingly replacing their Arab counterparts in Israel’s labor-intensive housing construction market. In December 2024, the Associated Press addressed the issue by writing about the Indian construction worker Raju Nishad in Israel. 

"Wearing a safety belt, helmet and work boots, Raju Nishad navigates the scaffolding, hammering blocks that will form part of a building in a new neighbourhood in Beer Yaakov, Israel. He and other Indians are part of an Israeli government effort to fill a void left by tens of thousands of Palestinian construction workers barred from entering Israel since Hamas' unprecedented Oct. 7, 2023 attack," the news outlet wrote on the social media platform 𝕏. 

There are mixed reactions from the Israeli businesses. While welcoming the inflow of foreign workers, many Israeli companies are concerned about the growing employment costs linked to the inflow of foreign workers. 

“Since Palestinian workers were barred from entering, the shortage worsened, leaving us no choice but to hire foreign workers,” said a CEO for a large company on condition of anonymity. 

“But the state shouldn’t burden us with excessive costs. We pay minimum wage while in Dubai they pay a third of that, and on top of that we’re hit with taxes and fees that drive expenses up,” the CEO added.

The recruitment of foreign workers includes a bank guarantee of NIS 8,500 (around $2,600) per worker, visa renewal for additional NIS 8,500 and monthly service fees of NIS 2,000 (around $600). 

However, despite some challenges and growing recruitment costs, the overall sentiment towards the foreign workers appears to be positive. 

“We got workers who actually come to work,” the head of a large Israeli retail chain stated. “No more morning calls from store managers saying five cashiers called in sick. The workers are focused, there are no arguments, and productivity is up."