Key insights
- People risk is now a primary constraint on growth. As demand for data centers accelerates, skilled labor shortages are limiting the ability to scale and deliver on client commitments.
- This talent shortage is structural. Data centers are competing with adjacent industries for the same workforce while facing an aging talent base and rapidly expanding demand, creating a gap traditional hiring alone cannot close.
- Retention, not just hiring, is the more pressing challenge. Turnover remains high despite rising salaries, driven by unmet expectations around career growth, culture and purpose. This challenge is forcing organizations to rethink total rewards and the broader workforce experience.
The data center boom is emerging as one of the defining infrastructure stories of our era. Fueled by the rapid expansion of artificial intelligence and the continued digitalization of the global economy, billions in capital are being deployed, sites are scaling rapidly worldwide and demand continues to accelerate.
Despite growing focus on power, water resources, land acquisition and financing, there's a large constraint that's often overlooked: people.
The data center ecosystem relies on a highly specialized workforce and hands-on technical expertise, spanning the workers building each site, to the engineers, technicians, electricians and operational specialists who keep them running.
This workforce isn't unique to digital infrastructure. It's shared across adjacent sectors, particularly energy and utilities, with more than 40% of roles overlapping across industries.1 In recent years, more than one-third of job postings across these sectors have targeted the same talent pools, intensifying competition.2
As demand accelerates, hiring pressure is outpacing the labor market's ability to respond. Data center job postings have surged 64% in recent years, far outpacing broader economic growth.1 The result is not simply a tight labor market, but a structural imbalance that is beginning to constrain growth.
This imbalance is already affecting business performance. "Inability to deliver on client commitments or scale new capacity highlights the broader implications of people risk," explains Russell Paape, area vice president at Gallagher. High turnover is already affecting cost and delivery.
What begins as a hiring issue quickly impacts delivery and revenue.
Talent market under strain
The workforce challenge facing data centers is not a single issue, but a convergence of structural pressures reshaping the labor market.
Organizations are no longer hiring within a single talent ecosystem but operating in a more complex, cross-sector labor market. This shift is reshaping hiring dynamics.
At the same time, demand is accelerating across both technical and trade roles. Between 2022 and 2026, demand for robotic technicians increased by 107%, HVAC engineers by 67%, and industrial automation technicians by 51%.4 At the same time, job listings for construction workers and electricians rose by 27%.4
Growth in positions such as robotics technicians, HVAC engineers and automation specialists underscores that AI and digital economy is deeply physical, requiring large numbers of skilled workers on the ground.
Meanwhile, talent supply remains constrained. Nearly one-third of the technical workforce is nearing retirement.3 Shortages of skilled labor have persisted across the industry for more than a decade,5 suggesting a structural, not cyclical, imbalance.
The consequence is a widening gap between the rate at which capacity must be built and availability of the workforce required to build and operate it.
The scale of demand too has fundamentally changed. Large data center campuses that once required 750 workers now demand 4,000 to 5,000 personnel at peak construction.6
This shift brings with it new logistical challenges. Labor must be mobilized across regions, often into locations with limited local talent pools. As a result, companies are offering relocation incentives, higher wages and even on-site housing to attract workers.
Addressing the challenges through an integrated approach
As people risk becomes a defining factor in data center performance, organizations need to take a more integrated approach to workforce strategy, risk and growth.
By combining expertise in risk, benefits and organizational strategy, Gallagher supports clients in navigating talent challenges and sustaining growth in an increasingly competitive market.