Intelligent Data Centres Magazine, Issue 53

As the skills shortage looms over the sector, could recent mass layoffs provide a way to boost the data center industry’s headcount, foster diversity and lower the average industry age? Sam Prudhomme explores this in more detail as an imminent solution to the problem.

For over a decade, the data center industry has struggled with the simple fact that there just aren’t enough skilled workers to fill a growing number of jobs.

Today, operators already struggle to fill existing roles and the demand for data center infrastructure is only growing. In the US especially, the Uptime Institute’s global industry survey for 2022 reported that ‘much of the existing workforce is aging and many professionals expect to retire around the same time’. If the data center industry doesn’t successfully attract new talent before the previous generation ages out, there’s no telling how much valuable experience and expertise will fall through the generation gap, never to be reclaimed.

Of course, if enticing new hires to the data center industry was simple, the industry wouldn’t be in this predicament. If the methods used up until this point have failed to solve the problem, maybe it’s time for a change of tactics, especially since 2023 might just represent a once-in-a-generation opportunity for the industry to close the skills gap. 

The Tier II/III market shift
As the amount of data created, processed and consumed around the globe doubles every few years, the demand for digital infrastructure grows with it. In the US, McKinsey predicts that, by 2030, demand for data center capacity will reach 35 gigawatts (GW), up from 17 GW in 2022.

A great deal of that demand for new capacity is likely to be found outside the highly saturated Tier I markets (like Northern Virginia, Dallas and the San Francisco Bay Area) in Tier II and Tier III markets, where population far exceeds local hosting and compute capacity.

Due to the current macroeconomic conditions in the US, hyperscale operators are pushing the capital expenditure (CapEx) required to meet growing demand onto the colocation market. Rather than build a campus, for example, the latest trend is to distribute that hub across multiple colocation data centers by buying out more capacity. This turns the immediate cost of something like a multi-billion-dollar campus project into an ongoing operational expense, which looks better to shareholders.

However, this recent shift has resulted in a dearth of available capacity in Tier I markets. In 2021 and 2022, absorption in the country’s largest markets (Ashburn, Phoenix, Dallas, etc.) effectively tripled. As a result, hyperscalers are pushing out to less saturated regions, including the Midwest, Boston and Denver.

Massive multi-megawatt campuses are designed to be hyperefficient, requiring just a handful of trained staff to oversee thousands, or even tens of thousands of servers. Yet smaller, legacy facilities in Tier II and Tier III markets aren’t as efficient and a shift in the industry towards a greater number of smaller sites is likely to intensify the demand for staff even further.

Work without workers
For an industry so integral to the running of the modern world, the data center sector suffers from a lack of visibility, especially compared to the fastest-growing STEM fields like FinTech and cybersecurity. Experts believe this lack of visibility plays a significant role in the industry’s struggle to attract new talent, with the Uptime Institute finding that ‘the sector is largely invisible’, and that ‘a low level of familiarity with data centers or the sector’s career paths’ is damaging recruitment.

Little has changed in the three years since the release of Uptime’s 2019 report and, according to its 2022 survey, 53% of operators had difficulty finding qualified candidates for open jobs, up from 47% in 2021. Unless steps are taken to reverse this worrying trend, the effects of the skills shortage in the US are on track to intensify even further, as a stagnating workforce contends with growing demand for workers. Uptime predicts that, by 2025, the industry’s staffing requirements will grow to 2.3 million professionals — adding 300,000 trained professionals to the sector in as little as five years.

Diversity is a key issue as well, with the Uptime Institute reporting that only 4% of data center operators even approach gender parity in their workforces. More than half of the companies in the industry have a staff that’s 10% women or less and one-in-five data center teams do not employ any women at all.

Inclusion, education and competency specific skill sets: Solutions to the skills shortage
In an industry where the majority of employees are white, male and aging out of the workforce faster than they can be replaced, it’s easy to see why an infusion of diversity is a logical first step towards combatting the skills shortage. If the problem is to be addressed, however, it’s important to recognise that there is no single, simple solution.

Increased diversity can drastically expand the workforce, but creating the visibility, interest and cultural shift will take time. Cultivating a more diverse data center workforce will be the challenge that makes or breaks this industry over the next decade, but educating and training a new generation of workers also requires operators to work hand-in-hand with educational institutions to raise awareness and provide tools for a new generation to break through. Establishing the necessary links with educational institutions and forming the kind of pipeline that the industry needs is a complex process and, even if it were in place tomorrow, it would be years before the first wave of new graduates entered the workforce.

Cross-training is another tactic being embraced by operators in the data center industry as a viable way of broadening their talent pool. In this scenario, the sector can build out its workforce by leveraging the intricate knowledge of external contractors who have competency-specific skill sets. This includes heating, ventilation and cooling (HVAC) professionals, carpenters and construction firms with first-hand experience of working within data center environments. Using cross-skilling to bring expert professionals into the industry is especially crucial with regards to white space engineering.

Selecting a partner with the ability to custom-engineer data center white space to meet requirements on time, under budget and at scale, and has the skilled labour-force to do so, is paramount. Moreover, adopting a competency-specific approach can allow external partners, such as mission-critical solutions providers, to work as an extension of their customers’ organisations, providing access to a highly-skilled workforce that’s 100% focused on delivering customer success — no matter the location.

A once-in-a-generation opportunity
Championing diversity, educating the next generation, raising awareness and cross-skilling are all vital (and widely discussed) solutions to the skills shortage. Yet all of them will take time.

There is, however, another possible solution available right now — one that might present the best short-term alleviation of the industry’s issues we could have hoped for and one which could create the runway necessary to make long-term changes that will lead to a sustainable, healthy future for the data center workforce.

For the US data center industry, the recent mass layoffs could represent a once-in-a-generation opportunity to recruit, cross-skill and retain tens of thousands of new staff – people with experience, relevant knowledge and fresh perspectives.

Cross-training is already being embraced by some operators in the data center industry as a viable way of broadening their talent pool. What’s clear is that with the introduction of more than 100,000 job seekers to the tech sector, the growing need for skilled staff, an aging workforce and steady demand means the time is ripe for a data center hiring boom.

This, in addition to leveraging the competencies of other locally sourced contractors, could prove invaluable in taking meaningful action to close the skills gap.