Technical know-how is in demand as the sector sets new records.
As data center investments proliferate across America and the world, one thing has become increasingly clear: The world is going to need a lot more data center workers.
According to a report just released by Jones Lang LaSalle, “Finding the right talent remains a challenge for data center operators and the issue is becoming more acute given the rapid expansion of the sector in recent years.”
A recent Uptime Institute Staffing Survey confirms this finding. Half of all data center operators report they are having problems finding junior and mid-level operations staff. More than 40% say they can’t find enough help for electrical jobs. A third are having difficulty hiring enough mechanical technicians.
Matt Landek, managing director of JLL’s Data Center and Telecom Business Unit, says the labor shortages are especially acute in Northern Virginia, Dallas-Fort Worth and Greater Phoenix.
“They remain the most competitive markets for talent,” says Landek. “They will have the highest job vacancy rates by volume of all the largest data center markets. They currently have the most open positions. Secondary markets will have longer lead times to find and bring those folks in.”
Asked to pinpoint the causes of the labor shortfall in the U.S. data center industry, Landek says, “There are three key factors. First is basic supply and demand. The sheer volume of new capacity coming online is driving this rising demand for labor. Second is an aging workforce. Data centers are not immune. And third is the stressful environment. We have seen technicians leave the industry to go into a less stressful asset class.”
“We have seen technicians leave the industry to go into a less stressful asset class.”
— Matt Landek, Managing Director, Data Center and Telecom Business Unit, JLL
The hardest skill sets to find, says Landek, are technicians with 10 years or more of experience. They represent the “gold standard” of the labor pool, he notes, adding that the second hardest labor to find are construction workers.
“We are facing a shortage of construction managers with experience in green construction,” he says. “Emerging data center markets don’t have these people. The challenge for emerging markets is that companies are having to relocate people from other markets. We also need more higher education programs to train these people, but that is not happening at the pace we need. Firms are having to take on unskilled labor and train them.”
Wanted: Military Veterans
Some of the most successful worker training programs are those targeting military veterans, says Landek. “The greatest pipeline we have are former military service members. They have so many transferable skills. They are used to working in very programmatic structures. Navy nuclear operators are the most-sought-after veterans.”
Many jobs in the data center industry pay north of six figures. “Those working in mission-critical environments are making 10% to 30% more than their counterparts in an office environment,” Landek says. “We are also seeing significant fringe benefits offered to workers in this industry.”
What will it take to solve the labor shortage? Again, Landek is blunt: “We need to think differently about talent. Securing talent is not the hard part. Keeping the talent is. Any technician can go across the street and make more money. We must create a better employee experience. Workplace culture matters. The care component is important. Employees need to see a clear career path. And finally, we must focus on soft skills and leadership abilities. People climb the career ladder in this sector faster than in any other asset class. We need a better conversation around this.”
Pat Lynch, executive managing director of CBRE, agrees. “Finding the workforce needed to build a data center is a real challenge,” he says. “Constructing the data center is one of the steps our clients must investigate. That is why groups within the industry are talking to military vets. They are used to high-risk scenarios and working under stress. For them, working in a data center can be a great second career. At CBRE, we are looking to make headway in that area.”
QTS Model Is Working
QTS is in the middle of a 1.5 million-sq.-ft. data center campus expansion in Henrico County in Greater Richmond, Virginia. Sarah Wurth, spokesperson for QTS, says the firm has enjoyed success in hiring and retaining qualified workers by offering competitive pay and benefits. “Our culture and competitive benefits are differentiators in attracting and retaining our employees,” she says.
On background, we have learned that QTS provides and funds ongoing training and certifications for facility operations, technology operations and information security personnel. It is also worth noting that their top recruits are military veterans. About 40% of QTS’ operations staff have served in the U.S. armed forces.
QTS is part of a rapidly growing Virginia data center hub that employed 26,000 people and generated an economic output of $46 billion in 2023.
The same JLL report that chronicled the “Data Center Labor Cliff” put into perspective just how quickly this asset class is growing. “The U.S. colocation data center market has doubled in size in just four years, yet vacancy is at a record low of 3% amid unsatiable demand,” JLL said.
Middle America Sees Rising Demand
Andy Cvengros, managing director with JLL’s Data Center Markets team, says that there is a “tremendous amount of competition among providers to staff up these buildings. In rural areas, there are not a lot of people who can staff them. This is not stopping massive amounts of capital from trying to get into that space.”
The rush to build new space is especially pronounced in Dallas, Chicago, Phoenix and Atlanta, says Cvengros. “The greater Ashburn area of Loudoun County in Northern Virginia is out of power for the foreseeable future, and that is driving more projects to Greater Richmond and the interior part of Virginia.”
This race to emerging markets creates new challenges, according to Cvengros and other experts interviewed for this story. These trends include the following:
- Rural markets are now more in play for data center sites than ever before, particularly if they have the requisite power and fiber already connected to the site.
- Fast-growing, emerging markets for data centers include Central Virginia, Central Mississippi, Northern Indiana and Greater Albuquerque.
- The data center market is forecast to grow at around 10% annually through 2030, according to NAI.
- A total of 300 new hyperscale data center facilities have been built in the last two years, with 39% of them coming in the United States. China and Japan rank second and third, per Statista.
- Large power customers prefer to connect to renewable sources of energy such as wind and solar, but their total electricity demand, particularly for cooling, is so great that they cannot rely solely on alternative energy.
