Are Israel's state defense companies lacking in diversity? -comptroller's report

State defense companies Rafael, Israel Aerospace Industries and Elta systems lack diversity and minority representation in their employee base and boards, according to the State Comptroller’s Report.

Rafael fared worse in the diversity metric than IAI, having fewer minority groups in its ranks.

While there was no required rate of employment for Druze and Ethiopian Jews among state defense companies, the comptroller still saw the proportions as being low. No goals were set to encourage promotion and representation of Ethiopian Jews and Druze, but Rafael and IAI did seek to recruit from these populations, the report said.

How did Israeli state defense firms employ from different diverse sectors?

Some 2.3% of IAI employees were of Ethiopian descent, as were 0.58% at Rafael. There was also a lack of Ethiopian board members.

While Druze make up 1.6% of Israel’s population, only 0.16% of IAI’s employees were Druze, as were 0.15% in Rafael. Nevertheless, IAI and Elta did have adequate Druze representation on their boards, the report found.

All three companies were also said to have adequate representation of women on their boards, with 15.3% of senior management roles at IAI and 22.6% at Rafael. This was up by 3.3% and 2%, respectively, from 2018-2021.

Until 2022, there were no company goals for promoting women to senior positions. The report took issue with the existence of salary disparities between men and women, however, which it attributed to more men being in higher ranks. The report did not factor in other possible causes for the disparity.

While women were represented on the boards, this was not the case for haredim (ultra-Orthodox) and disabled citizens. Despite being 8% of the working-age population, haredim only made up 2.6% of IAI’s employee base and 0.9% of Rafael’s. Employment of disabled people in IAI and Rafael was 2.3% and 0.58, respectively, which is lower than the required 3%.

While disabled people had set quotas for state companies, the comptroller noted the lack of legislation and requirements for the number of Arab, Circassian, Druze and Ethiopian employees.

“Diverse employment of employees from different populations has many advantages, such as improving creativity and innovation,” the report said. “Diverse populations include members of both sexes; people with disabilities; members of the Arab, Circassian and Druze population; Ethiopians; members of the ultra-Orthodox population; and new immigrants.”

State Comptroller Matanyahu Englman encouraged the defense companies to improve integration of minority populations.