Israel’s transport crisis is causing upheaval in the job market. Most Israelis, whether they drive to work or use public transport, do not want to commute for more than 45 minutes each way.
In a reality of endless traffic jams and slow-moving, cumbersome public transport, this reduces the distance in which employers can find workers, and at which workers can find jobs.
Commuting habits have a wide-ranging effect affect – the Israeli economy and employee productivity, the office real estate market, opportunities in an era of dramatic changes in the job market, and the quality of life of employees.
The data: Almost 64% come to work by car
According to the Central Bureau of Statistics social survey data from 2023, which are the most up-to-date official data, almost 64% of the country’s citizens come to work by car, compared with about 18% by public transport, almost 2% by bicycle and scooter, and almost 8% walk to work. 70% of Israelis take no more than 45 minutes to travel to work.
These data are also consistent with surveys conducted around the world and studies that reflect the time people are willing to spend on their way to and from work.
So two hour commutes will never become the norm, but rather the time of the commute will remain the same, while the distance radius will change. Those who live in dense urban areas will be able to find job opportunities easily, and those who live in suburban areas will feel greater distress.
“Heads of local authorities have got used to the fact that when they planned housing units, then developers came and built housing units. They thought that they would do the same with jobs, and then they would also build offices that would bring a lot of money to the city from municipal taxes, but that is not the case,” explains Alon Sigler, partner at Last Mile, a city planning and transport company.
“Jobs are located in a place that is convenient for employees to get to. Which employer would want to set up an office in a neighborhood that has two exits that are blocked every morning? That’s why there is a surplus of approved office spaces that are not being utilized, and the difficulties in getting to and from work greatly limit the places in the center of the country where it is possible to locate offices.
“If you invest in public transport, it is a very effective solution for many people and you see this in Petah Tikva next to the light rail Red Line and also in Holon in preparation for construction of the Green Line.”
Tel Aviv invests more than its neighbors in alternatives to driving
Indeed, in Tel Aviv the data is different than in the rest of the country. According to the social survey in the Tel Aviv sub-district, there 77.5% of employees reach their workplace within up to 45 minutes and only 54% of employees use cars, compared with 21% using public transport, more than 6% using bicycles and scooters, and about 13% walking to work.
These can also explain changes in the office market. Electra CEO Itamar Deutscher recently told “Globes,” “Outside of Tel Aviv there is a huge weakness. There are spaces offered for rent at prices that are lower than they were here in the last decade, but in Tel Aviv it is less noticeable and there are buildings with waiting lists.
“I personally think that Tel Aviv will be less affected because in the end there is significance to an office that is a scooter ride away, but in the periphery – even in the first circle outside Tel Aviv, it can take a long time for the markets to recover.
“The product most needed by all of us is workers, and in Tel Aviv it is easiest to find workers, certainly in the tech sectors. These are not people who get into a car at all. If I take an office in Tel Aviv and move it to Ness Ziona, will the workers come? That is a question.”
In Tel Aviv, in addition to the railway and light rail, the municipality has paved dozens of kilometers of bicycle paths and operates public transport routes that significantly improves ways of getting to work.
Sigler says, “”The distance from east Givatayim to the Hashalom railway station is the same as the distance from the sea to the Hashalom station – about three kilometers. Despite the short distances, only one city is investing in alternatives to the car such as bike paths and priority lanes for public transport. If you leave Tel Aviv, you find most cities prefer you to drive everywhere, then complain about traffic jams.
“I prepared a map that shows the invisible border between the cities. In green, I marked buildings that are near bike paths up to five kilometers from the station, in red, buildings near the light rail stations, and in yellow, I marked the priority lanes for public transport.
“Not surprisingly, all the data show that the chance a Tel Aviv resident will drive to work is much lower than the chance that a resident of Ramat Gan or Givatayim will make the trip by car, even though they travel the same distances and to the same destinations.”
Employers are taking back parking spaces returned during the Covid pandemic
“Every large company you look at has done a commute check for employees as part of its strategy processes,” says Colliers Israel CEO Sarit Itzhakov. Colliers Israel advises on efficiency and transition processes for companies, mainly in the tech and financial sectors.
She explains, “In the first stage, they look at where their employees come from and what routes they take. Today, an employee’s working time at the workplace is an average of two and a half years, so when considering an office move, it is better to do it in a way that will provide a solution for both the existing employee and the potential employee.”
Itzhakov adds, “The employer always looks first at whether there is a train, especially a railway station, and then a light rail. Only in the third stage do they look at buses. At the same time, some of them prefer proximity to main roads.”
The issue of transport has become so significant that Yitzhakov explains that property owners are offering shuttles to try to attract potential workers to their employment area.
“We had a company in Petah Tikva whose employees come from the area and were looking into the possibility of going to Rosh Ha’ayin or other geographic areas to cut costs, but the management unanimously decided that they would not move from the Petah Tikva area so as not to cause upheaval for employees. This is a strategic decision for employees and the company did not want to take the risk.
“In contrast, another company in Petah Tikva did not mind relocating in another area because it organizes transport for employees so it moved to Modi’in. It was still a very dramatic event and in retrospect, we know that there was a very high rate of abandonment. After a fundamental change in an organization, there is always abandonment, but here more than 10% left, which is very high.
“On the other hand, as soon as they moved to the Modi’in area, they were exposed to an additional target population that they could hire from the region, which previously they had not been able to attract. Specifically in this case, they were looking for workers, not tech developers, so the target population was suitable for the change.”
Working from home, which many had high hopes for during the Corona period, is also fading, according to Yitzhakov: “We see a trend of trying to bring back parking spaces to offices after they were given up in order to cut rent costs, because today more people are working in the office.
“The closer you get to the railway, the smaller the number of parking spaces the company needs. And in general, despite Trump’s statements, the ESG field, which requires being vigilant about existing issues, is still very prominent among global companies. They are trying to reduce the number of parking spaces they rent for their employees, and the number of vehicles, and cancel leasing arrangements. Companies in Tel Aviv don’t even have a single parking space for their employees, simply as a policy there are no parking spaces.”
Commuting times not only affect employee recruitment but also their productivity. “Today, employees leave home later to avoid traffic jams. And they leave the office earlier to avoid the afternoon rush hour. Of course, employees claim, and I assume that this is also true, that they return home and work from home, but the productivity rate drops significantly.”
She adds, “I think employers turn a blind eye to the fact that employees arrive later and leave earlier. In the end, what interests them is productivity, and if the employees know how to produce output within the working time given to them – to complete their tasks, then the employer will not really care.
“I can say that in some places it means that with more time in the office the employee could do more, there is no doubt. But this is old-fashioned thinking. Today, employers think differently because there is no choice. It is important for the employer that employees feel good because then they give higher productivity and are more creative.”
Employees: 60% gave up work due to long commutes
The crisis in public transport infrastructure is felt not only by employers and the office real estate market, but also, of course, by employees.
Itai Shafran from the Pitronot planning economics company explains that a survey found that 60% of respondents gave up a job due to too long commute times.
He says, “The job market is related to places that have the strongest connection and power of mass transit systems. In Israel, this location is very clear, and it is between Yigal Allon and Menachem Begin Streets in Tel Aviv. “This is the place with the strongest economic power in the country, and it has also caused urban districts in the city to lose their value, such as Rothschild Boulevard.” Shafran adds, “The office real estate market outside Tel Aviv has not only weakened, in the last five years, construction starts have also reached unprecedented numbers. If demand is approximately between 700,000 and 800,000 square meters per year in the country, permits in 2024 totaled 1.5 million square meters, of which only 13,000 square meters of construction began in Tel Aviv.”
So according to him, “If you paid NIS 50-100 per square meter in the metropolitan region, near Azrieli Towers, you will pay NIS 150-200 per square meter. But you improve your ability to obtain human capital in a way that covers much of the country, and thanks to the railway. Employees arrive from Jerusalem in less time than from Kiryat Ono by car. The financial cost is nothing compared with the recruitment capacity.”
Published by Globes, Israel business news – en.globes.co.il – on April 16, 2025.
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