Each service provider in the outsourcing industry seeks a competitive edge — whether it’s domain expertise, labor arbitrage or a particular type of talent that sets it apart from many other companies offering similar services. One company in Israel has built a successful operation that boasts all three. Its unique strategy: building IT centers in specific neighborhoods in Israel filled with ultra-orthodox Jewish women, who often find traditional jobs outside the home difficult or impossible.
Matrix IT Ltd., a systems integrator and software services firm that is Israel’s largest IT company, is using the programming skills of the often well-educated women to staff its three-year-old outsourcing division, called Talpiot. In an unusual arrangement, Talpiot has intentionally built programming centers in traditionally religious neighborhoods in Israel where many ultra-orthodox Jews live.
Talpiot’s Competitive Advantage: Location and People
According to Joseph Rosenholtz with US-based Trace Consulting Corp., which serves as the North American representative of Matrix and Talpiot, the arrangement benefits both sides. “[Talpiot] brought the technology to the population,” Rosenholtz says. “They found areas where there are large concentrations of highly educated people who had the basics to become successful in the programming world.” The company then built state-of-the-art technical centers in those areas, “and it’s been a real success.”
As it is used in Israel, the term ultra-orthodox often refers to Jews who, among other things, choose to segregate themselves from the general public. They typically shun television and are less likely to work in general office settings. There’s no disdain for technology per se, however, and many ultra-orthodox Jewish women are highly educated, with degrees in disciplines such as computer science and engineering.
Catering to a Unique Set of Staffing Needs
Large families are the norm in ultra-orthodox households, along with a heavy focus on children and their care. But because many ultra-orthodox husbands study the Talmud full-time, women are left as the sole breadwinners. Because of their religious beliefs, the women often find conventional employment in the secular workplace uncomfortable at best. Ultra-observant Jewish women are more formal in their interactions with men, for example, than in the average workplace. Many – though not all – of the Talpiot workers are ultra-orthodox, and Talpiot addresses issues specific to them by offering separate break rooms to women workers, for example. Overtime is limited to avoid cutting into family time.
“People are more careful [about] language” at the Talpiot facilities, Rosenholtz says. “There is a certain sensitivity toÉ the proper way to conduct themselves. There are certain kinds of jokes that might make the rounds in the regular world that wouldn’t be acceptable there.” However, he hastens to add, the working environment is quite Western. “You’d be getting the wrong impression if you thought it was prudish. [Workers are] just a little moreÉ sensitive to behavior.”
The 300-plus Talpiot employees work on a range of application development projects, including building and maintaining systems in both .NET and J2EE, handling quality assurance, and working on database and business intelligence projects. Talpiot clients include Hewlett-Packard and SAP in Israel, Rosenholtz says, and over 30 mid- and large-size companies in the United States. The American European Group, or AEG, the parent company of a number of property and casualty insurers, recently signed a multi-year outsourcing deal with Talpiot.
Because the ability to work at challenging IT jobs while remaining true to their religious values is so appealing to the women, Talpiot is able to pay far lower wages than are offered in nearby Tel Aviv. That enables Talpiot to employ Western workers while remaining financially competitive with outsourcing firms located in traditional low-wage countries such as India and China.
Wages are “considerably less” than elsewhere in Israel, Rosenholtz admits. “You’re not making as much money as if you drove to Tel Aviv.” But balancing that is the fact that the workplace is minutes from home, includes nursing care nearby, and is “a friendly environment where [workers] feel comfortable religiously and ethically. People will work for less in that kind of environment.”
The ratio of women to men at Talpiot is perhaps three or four women to every man, Rosenholtz says. At least for now, many of the team leads are men who are mentoring the women workers, since many are entering the workplace for the first time. “When a woman enters at entry level, she has catching up to do, so they’re carefully mentored,” he explains. “That’s part of what works well for us. We’re very careful to bring programmers along.” There are women in management as well, however, including Talpiot’s COO.
How the Outsourcing Client Benefits
The company maintains that its arrangement gives Western firms a chance to employ workers who share Western culture and values, and for whom English is a first language, but at competitive wages. Also, Israel is just seven hours ahead of the Eastern time zone, compared to India’s nine-plus hours. That makes meetings within a single business day in both time zones easier to schedule.
Worker turnover is extremely low among the 300 or so Talpiot workers, Rosenholtz maintains, with rates approaching two percent. “We have almost no turnoverÉ because these people have found a great place to work.” Clients are customarily given a two-year guarantee that key programmers will remain on their projects.
“A lot of these programmers had no other professional opportunities,” Rosenholtz says. “These are people who without this opportunity really would have been working at menial tasks or babysitting.”