APAC data centers plagued by skills shortage

The Asia Pacific (APAC) is home to hundreds of data centers. With a diverse geographical landscape and numerous local regulations, the data centers vary from regional demand to domestic markets. Regional data centers are often located in Hong Kong and Singapore while domestic ones are country-specific such as in Japan, China, and Australia.

According to Structure Research, the colocation market for the Asia Pacific will grow at an expected compound annual growth rate of 12.2% from 2018-2024. Much of the demand comes from global cloud providers, social media platforms, media content, and video streaming, e-commerce platforms, and banking.

With that many data centers, the demand for a skilled workforce would be high and competitive as well. However, the Covid-19 pandemic has spurred employees to rethink their careers, work conditions, and long-term goals. This has led to a phenomenon known as the Great Resignation and in Singapore, this movement is being led by millennial workers.

According to Employment Hero’s report on Employee Movement and Retention which surveyed 1,000 workers around Singapore to discuss their plans for job movement, more than half of Singaporean workers (59%) are planning to look for a new job within the next 12 months, and it is younger workers who are leading the employee exodus, with 71% of millennial employees aged 25-34 signaling they will be looking for a new role in the coming year.

As such, an increasing number of APAC data centers will be migrating to the cloud or relying more heavily on managed services by 2025, as a shortage of skilled workers impacts the sector’s ability to build new on-premises capacity to meet post-pandemic demand.

Research carried out by ABB Electrification in partnership with Data Center Dynamics (DCD), reveals that the current 50/50 split between data center equipment housed on-premises versus co-location or cloud-based solutions is set for a shakeup over the next four years, with more than two-thirds of senior industry experts indicating that this will shift to just 25% on-premises and 75% to the cloud model in the near future.

For Kent Chow, ABB’s Data Center Segment Leader for the Asia Pacific, Middle East, and Africa Region, “Our research shows that the data center industry in the APAC region is trying to expand and respond to growing data demand but being held back by a shortage of suitably skilled people. This is an issue the industry has been facing for many years and it can have big consequences for operators, from extra costs to delays in project delivery times.”

An industry shift for APAC data centers

Interestingly, 42% of data center operators believe there’s not enough skilled labor to deliver increased capacity requirements across the APAC region. And it is not surprising why they feel that way.

With tech adoption accelerating in APAC, skilled tech professionals are always on the move, looking for better options. Several big tech companies like Google, Dell, AWS, IBM, etc have already invested and pledged to work with local education institutes and governments to train and produce more skilled workers.

However, most of these workers would often move out of Asia or look for better opportunities outside their country. Also, three out of four respondents agreed that business transformation in APAC needed hyperscale to progress, but the research revealed that these growth plans are being hampered by several issues which have been created, or made worse, by the pandemic.

The skills shortage issue in the Asia Pacific region mirrors trends in Europe, where 42% of data center operators believe there’s not enough skilled labor to deliver increased capacity requirements across the continent. Over 80% of European companies say they have been affected by labor gaps and more than seven out of ten believe the pandemic has made the industry’s skills shortages worse.

“The continued high demand for data centers combined with the lack of specialist sub-contractors and trades is driving many data center operators to increase their offsite construction. To support data center operators ABB has developed several solutions that limit site work – both commissioning and construction – which can significantly improve speed to deployment,” added Kent.

These include plug-and-play prefabricated or packaged solutions that can reduce deployment time by up to 50% as they are quicker and easier to place and commission on site. eHouses for example are prefabricated and pretested before being transported to the site. As these solutions are fully integrated and debugged before shipment, fewer workers are required on-site, and installation and commissioning time are reduced significantly.

While these solutions may help address some problems in data centers, the reality is, there is a global shortage of skilled workers and it does not seem to be solved anytime soon as well. With the new year approaching, many skilled workers may continue to look for new job opportunities. The only hope now is they consider remaining in the data center industry and more skilled workers be produced in the near future to meet the growing demand.

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