It is the exchange rate.
The Israeli shekel is currently one of the strongest currencies in the developed world, and for any company that earns in dollars or euros but pays its engineers in shekels, that strength has become a real and growing line item. For companies selling into Europe and the United States, buying development capacity in Central Europe in euros or at CEE rates is no longer only a talent-access play. It is increasingly a currency play as well.
This article lays out the numbers behind that shift, using Israeli sources, and explains why we believe the two trends a tight senior talent market and a historically strong shekel point in the same direction.
A 30-year high: What the shekel has done?
The headline is straightforward. In the spring of 2026, the shekel broke below the symbolic level of three to the dollar for the first time in roughly three decades, and it has held that territory since. Over the preceding twelve months the currency appreciated by around 20% against the US dollar, touching its strongest level since the early 1990s.
This is not a story of a weak dollar alone. Israeli analysts have been careful to point out that the shekel strengthened against both major currencies. The Jerusalem-based Kohelet Policy Forum noted that since the Bank of Israel’s late-March rate decision, the shekel gained roughly 5% against the dollar and close to 3% against the euro in a matter of weeks and concluded that when a currency moves like that against both the dollar and the euro at once, “it becomes difficult to attribute it solely to dollar weakness. This is, first and foremost, an Israeli story.”
The drivers are largely positive for Israel: a current-account surplus, a falling risk premium as regional tensions eased, record foreign investment (net inflows of roughly USD 39 billion in 2025, up from USD 25 billion in 2024, according to Bank of Israel data), and the gravitational pull of landmark exits such as Google’s USD 32 billion acquisition of Wiz. Even the Bank of Israel’s interest-rate cuts three in six months have not reversed the trend.
The takeaway for employers: a strong shekel is a sign of economic confidence, not weakness. But for a company whose revenue is in dollars or euros and whose payroll is in shekels, every move below NIS 3/$ quietly raises the real cost of the same engineering team — without anyone changing a single salary figure.
Israeli tech salaries are climbing at the same time
The currency story would matter less if local compensation were flat. It is not.
According to the 2026 salary report from GotFriends, one of Israel’s largest high-tech recruitment firms — based on interviews with more than 15,000 candidates and roughly 1,500 placements — the average tech salary climbed to NIS 39,810 per month, a 7.4% year-on-year increase. The report also identified a clear “AI premium”: professionals specialising in LLMs, RAG, and NLP averaged NIS 43,212, around 9% above other technical roles.
The squeeze is sharpest exactly where demand is highest:
- AI, data, and cybersecurity — the Israeli Ministry of Labour’s 2026 report and analyses from recruitment house Ethosia both describe a market that has narrowed to a smaller pool of companies competing intensely for specialised, senior talent in precisely these fields.
- Senior and managerial roles — GotFriends recorded development-group managers and team leads jumping 21% to an average of NIS 56,646, as a wave of 2025-founded startups chased experienced, founder-level leaders.
- Top-end specialists — among the highest contracts the firm tracked in 2025 were a vulnerability researcher at roughly NIS 120,000 and a development manager package near NIS 100,000 per month.
So the picture is not a soft labour market with cheap talent. It is a selective, top-heavy market where the very profiles Israeli companies most need are both scarce and expensive and where the bill is denominated in an appreciating currency.
The hidden vacancy: Senior roles stay open
It would be easy to assume that, with reports of high-tech layoffs and rising numbers of job seekers, Israeli companies can simply hire locally. The data tells a more nuanced story.
The job-vacancy rate in high-tech services reached 4.8% in 2025, up from 4.2% in 2024, and the absolute number of unfilled vacancies across the Israeli economy hit a record high in late 2025. At the same time, the unemployment that exists is heavily concentrated among juniors and mid-level generalists — not the senior, AI-fluent specialists companies are fighting over. One widely cited Calcalist figure put a junior’s chance of landing a high-tech role at around 5%, while veteran and specialist talent remains genuinely hard to secure.
In other words, the Israeli market has a surplus of the profiles companies need least and a shortage of the profiles they need most. Currency strength makes the second problem more expensive to solve domestically.
Development is already moving abroad — the data confirms it
Perhaps the most telling signal comes from the Aaron Institute for Economic Policy at Reichman University. Its State of Israeli High-Tech 2025 report recorded something that had never happened before: a 1.1% decline in the number of R&D roles in Israel, the first on record.
R&D — the writing of code itself — has historically been treated as the “sacred cow” of Israeli tech, the one function that stayed home even when sales and marketing teams expanded overseas. The report’s authors flagged the decline as a trend to watch closely for signs of a brain drain and noted explicitly that even startups — not just large, mature companies — have begun hiring developers outside Israel.
This is the structural backdrop against which the currency argument lands. Israeli companies are already, cautiously, distributing development beyond their borders. A strong shekel and a tight senior market simply accelerate a decision many are already weighing.
Where Central Europe fits
This is the context in which we built Optiveum’s Israeli practice, and there are three reasons the fit is unusually clean:
- Time-zone alignment. Poland and the broader CEE region sit just one hour behind Israel. A developer in Warsaw or Kraków shares effectively the full working day with a team in Tel Aviv — no overnight handoffs, no “follow-the-sun” compromise. This is a structural advantage that more distant nearshore or offshore locations cannot match.
- A senior, vetted talent pool. Our database holds over 15,000 verified IT professionals from Poland and neighbouring countries, concentrated at mid- to senior level across software development, data engineering, AI/ML, DevOps, and network engineering — the same profiles that are scarcest and priciest in Israel right now.
- Currency and cost in your favour. Engaging CEE engineers in euros — or on transparent, all-inclusive CEE rates — sidesteps shekel exposure entirely. Given the variability between roles and seniorities, we won’t quote a single blanket “saving” figure here; the honest answer is that it depends on the specific role. But the direction of travel, with the shekel near a 30-year high, is unmistakable.
We should add one note of intellectual honesty, because our Israeli clients are sophisticated enough to ask: currencies move in both directions. Several Israeli analysts believe the very strength of the shekel today increases the likelihood of forces that will eventually restrain it — further rate cuts would narrow the interest-rate differential and could ease the upward pressure. A nearshoring decision should therefore rest first on talent access, delivery quality, and time-zone fit, with currency as a strong supporting argument rather than the sole one. Those structural advantages hold regardless of where the exchange rate settles.
The bottom line
For an Israeli company selling into Europe or the US, the maths has shifted. You are competing for a shrinking pool of senior specialists, paying salaries that rose more than 7% last year, and settling those salaries in a currency near its strongest level in a generation. Meanwhile, a deep pool of senior engineers sits one time zone away, available in euros.
Nearshoring to Central Europe was already a credible answer to Israel’s skills shortage. The strong shekel has turned it into a financial one as well.
Considering Central European engineering capacity for your Israeli team? We’d be glad to walk you through the talent landscape, realistic all-inclusive rates for your specific roles, and the engagement models — direct placement, body-leasing, or a managed team — that fit your setup. Contact us or browse current openings at career.optiveum.com.
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Sources: Bank of Israel; Globes; Calcalist (Ctech); The Jerusalem Post (GotFriends 2026 salary report); Ynet; the Aaron Institute for Economic Policy, Reichman University (State of Israeli High-Tech 2025); Kohelet Policy Forum. Exchange-rate and salary figures reflect publicly available data as of June 2026 and are subject to change. Currency movements are illustrative of cost dynamics and do not constitute financial advice.
