James Hart, CEO at BCS, delves into the ongoing skills shortage within the data centre sector; who is in short supply and how it is impacting the industry.

An ongoing area of concern within the data centre industry is the lack of sufficiently qualified professionals to meet demand, particularly across the design, build and operations disciplines. Over the past eight years, we have tracked this area closely and sought to gauge market practitioners concerns and the resulting effects on delivery of space to the market. This insight comes from over 3,000 senior data centre professionals across Europe, including owners, operators, developers, consultants and end users. The message from our latest Winter Report is clear – the problems remain and show no signs of improving.

The market context

As we stated in the summer last year, the industry is facing challenges associated with global factors, such as supply chain disruptions and raw material inflation. However, it continues to see strong growth through sustained demand for technology-driven services. Evidence suggests that the past six months has seen little change in this characterisation.

The European data centre market continues to demonstrate its robustness, with our latest survey indicating a confidence in the trend of decreasing supply and increasing demand. This sentiment is shared by 91% of survey participants, representing a slight increase from the 89% recorded in the summer of 2023. For the fourth survey in a row, there is universal agreement amongst respondents that demand will either increase or remain the same over the coming year.

The shortages continue…

Six months ago, we reported that some 98% believed that the coming year will see a decline in supply of staff, and this proportion remains unchanged. Some 93% of respondents also believe that this will be accompanied by a rise in demand for staff with specialist skill sets, again remaining unchanged since our last survey in the summer.

Who’s in short supply?

A simple answer is – pretty much everyone. Some four-fifths of respondents said that sourcing suitably qualified design professionals was becoming increasingly difficult. A similar level of concern is expressed about skilled professionals across the build sector whilst the third element of the process – the supply of sufficiently qualified staff to service the operational side of data centres – also faces difficulties.

Unsurprising amongst our respondents’, it is those whose role is to deliver new supply to the market that have expressed the highest levels of concern regarding the supply of skilled professionals in the design and build process. Amongst our developers, there is universal agreement that they are encountering challenges in finding skilled professionals, remaining at the high levels recorded a year ago. 93% of DEC respondents acknowledge concern over design professional shortages and there was universal agreement on build professional shortages.

Amongst end-user respondents, the availability of operational staff remains the area of biggest concern with 85% agreeing, albeit this represents a decline on the 94% we recorded six months ago.

Impact of skill shortages

We have previously seen that increased operating and labour costs and greater workload on existing staff equally topped the chart as the most cited impact by our respondents; 86% and 85% respectively six months ago. In our latest survey, that remains the case – with the former referenced by 81% and the latter 80%, both totals reflecting a small decline on the summer.

However, we have noted a small increase in what could be acknowledged as the most extreme consequence of skills shortages – lost orders. At 11%, this is a rise on the 9% indicated six months ago. In addition, the dearth in skilled professionals has also contributed to the growing popularity of outsourcing options, with approximately 44% of respondents acknowledging it as a factor.

The number of respondents who found it problematic to satisfy existing work this year has also risen in the last six months, with 49% stating that they had experienced difficulties in meeting deadlines or client objectives. As we have seen, this is considerably below the heights of 70% who cited it as factor in our summer 2020 research, when the effects of the COVID pandemic and subsequent lockdowns were at their most influential.

Of some concern is the 44% that stated that shortages had led to delays in developing new products/innovations, significantly up on the one-third who recorded this six months ago. In contrast, the proportion that noted they had ceased offering certain products or services has fallen to 12% from 22%.

Conclusion

Any successful industry relies on its ability to deliver its goods or services to its clients in a timely and cost-effective manner. The challenge for the European data centre industry is to ensure that the core building block of its offering can be achieved in this manner. Evidence suggests that these skills shortages have already had real consequences and directly impacted our respondents and indications are that the negative effects have been experienced in multiple ways.