November 24, 2024 by Dan Rabb and Jon Banister

Why The Winners Of The Trillion-Dollar Data Center Gold Rush Are Overwhelmingly White Men

This is Part 4 of the fifth annual installment of Bisnow’s DEI Data Series. Part 1 examined the diversity of the boards and executive leadership of the biggest companies in commercial real estate. Part 2 explored the political backlash to DEI efforts and how the landscape could change in the Trump administration. Part 3 looked at the push from CRE's emerging Gen Z workforce to increase diversity. To read the entire series, please click here.

Hundreds of billions of dollars are pouring into artificial intelligence data centers, creating an unprecedented development wave that is spreading to every corner of the U.S.   

But as data centers captivate the attention of the business world, it has become glaringly apparent the sector is remarkable in another way: It is mostly white and male. 

The pressure on data center providers to keep up with the explosive demand driven by Big Tech’s AI ambitions has led them to prioritize growth. The industry’s talent pipeline is already strained and its hiring practices center on increasing its ranks by any means necessary to get the job done. 

Diversity, industry professionals say, has taken a back seat — even though those efforts could help solve the greater data center labor shortage issues.

This has led data centers to fall behind other sectors that have made progress on bringing in women and people of color in recent years, and those pushing for more diversity worry it will have a hard time catching up.

Photo: Pixabay/TheDigitalArtist

“The broader commercial real estate space doesn’t have the greatest diversity numbers, but it’s even more stark in the data center space,” said Bobby Little II, a Black data center professional based in Atlanta at NTT Global Data Centers Americas. 

The homogeneity of the industry has been left largely unmentioned as it has risen to prominence, but many in the industry told Bisnow companies aren’t doing enough to bring in more women and people of color. 

“Data centers are extremely male-dominated and extremely white,” said one female data center executive who previously worked for a big brokerage firm and was granted anonymity because her employer wouldn’t authorize her to speak publicly. “It’s far behind the office brokerage world.”

Women accounted for just 8% of the data center workforce last year, according to a survey from Uptime Institute, an advisory company that certifies data center facilities and conducts an annual survey on the industry. This places the data center industry behind traditionally male-dominated sectors like mining, agriculture, manufacturing and construction. In this year’s Uptime survey, 80% of respondents said women make up less than 10% of their companies, while 20% of people said their companies employ no women at all.  

The issue of gender diversity comes up more often than racial disparities in news coverage, conference panels and other discussions around the data center sector’s shortcomings. And data center executives who set out to improve their diversity often start with gender, said John Lullen, who leads marketplace diversity solutions at IT services firm TEKsystems. 

“A lot of times what they’ll say is ‘I have a male-dominated workforce, and I need to diversify. I’m not excluding anyone, but I just look around the room and it’s dominated by men,’” Lullen said.   

There is little publicly available data on racial and ethnic diversity across the U.S. data center workforce. The two publicly traded data center REITs — Digital Realty and Equinix — both reported they are roughly 75% white. Both of those firms have stated diversity initiatives, but the vast majority of the data center industry is made up of private firms that don’t face pressure from shareholders on issues like diversity. 

An Uptime Institute survey found that fewer than 16% of data center operations professionals said their companies had any sort of initiative aimed at boosting hiring of racial or ethnic minorities. 

“It reflects the attention, or lack thereof, that this topic tends to get in the industry conversation,” Uptime Institute Research Analyst Jacqueline Davis said.

Data centers are undergoing an unprecedented development boom that has seen global inventory double in just two years and the sector transform from an obscure corner of CRE to a trendy asset class receiving more than $250B in annual investment. 

As artificial intelligence accelerates the data center gold rush, money is being poured into data centers from some of the biggest names in the business world: tech giants like Amazon, Microsoft and Google, and asset managers like Blackstone, KKR and Ares.

With trillions of dollars of expected growth, advocates for more diversity in the data center industry worry that its lack of inclusivity risks cutting underrepresented groups out of the boom.

Some programs have emerged from diverse workforce development groups that see the thousands of new jobs available in data centers and want to funnel young people of color into the industry’s entry-level roles.  

Beyond questions of equity and opportunity, there is a growing belief within the industry that data center firms need to ramp up diversity efforts to protect their bottom line as staffing shortages threaten growth. With qualified workers in increasingly short supply, experts say data center developers and operators must urgently try to tap into every available labor pool to keep up with demand. 

“It's not just a question of diversity — it's more a question of survival,” said Tito Costa, chief revenue officer at Elea Data Centers. “We need more people in the industry.”

The Problem

Leaders from across the data center landscape say its diversity problem has been caused by a lack of awareness about the industry as a career opportunity among minority communities and insufficient effort from companies to reach out to those communities.

They say the issue has been worsened by the industry’s labor shortage. 

Companies throughout the data center ecosystem have long struggled to recruit talent in general. Despite their growing prominence, data centers remain a niche industry that few new entrants to the workforce are aware of and even fewer target. Executives Bisnow spoke to said those who do target it are disproportionately white men. 

Data center developers, operators and builders have struggled for years to fill open positions and increase staffing numbers. 

Photo: Google Maps

A Digital Realty data center in Northern Virginia

More than half of data center operators report being unable to fill open positions, according to a 2024 Uptime Institute survey. It found that labor supply is consistently identified as one of three constraints — along with power availability and supply chain delays — that are preventing firms from building new data centers quickly enough to meet skyrocketing demand. 

With so few workers flowing into the industry organically, workforce development tends to happen through existing professional networks. And with a workforce that has little racial and ethnic diversity, industry insiders say these pipelines limit the exposure of communities of color to opportunities in the data center space.  

The issue has become more pronounced over the past two years as an unprecedented development boom and a wave of retirements have exacerbated the labor pinch. Firms are leaning on their existing networks harder than ever as they scramble to onboard staff as fast as possible, experts say. 

As a result, a largely white data center workforce has seen little change. 

“We needed people yesterday,” TEKsystems’ Lullen said. “When you have that speed-to-market mentality, if the industry is already not that diverse, there’s a higher likelihood that we’re going to build a more homogenous team.” 

Lullen said bringing more people of color into the data center workforce requires intentional, targeted efforts to develop new talent pipelines and build professional networks that extend into those communities.  

However, such efforts are few and far between. And there is little to suggest that industry leaders view the lack of racial and ethnic diversity as a problem that requires urgent attention or proactive measures, said Nabeel Mahmood, the founder of Nomad Futurist and a longtime technology and data center entrepreneur.

“The diversity, equity and inclusion topic doesn’t get a lot of visibility,” Mahmood said. “People are afraid of it … It needs to be prioritized more.”

Davis attributed this lack of attention, in part, to the global nature of the data center business. Ideas about what constitutes racial or ethnic diversity and which groups are considered minorities or disadvantaged differ significantly from region to region and country to country.  

The data center industry’s largest players, therefore, have tended to focus diversity initiatives on increasing the number of women in the workforce, an issue that has broad relevance across international markets — though surveys show the sector still has a long way to go to achieve gender parity.

Others who spoke with Bisnow reported a broad discomfort among data center executives when it comes to the issue of racial diversity and DEI efforts in general.  

Mahmood said there is a sense that these are a controversial third rail that needs to be avoided. He said executives are afraid to participate in DEI discussions because they involve pointing a finger at themselves and highlighting an area where they are underperforming. 

But Mahmood also said industry leaders aren’t prioritizing investment in diversity efforts because they don’t see a connection to their bottom line and therefore don’t consider DEI initiatives a good use of resources.  

“They aren’t taking it seriously because their primary focus is money,” Mahmood said. “If [DEI efforts] are a requirement, they just want to get somebody to check a box.” 

Advocates for greater diversity measures say DEI initiatives are often viewed by leadership as public relations exercises and programs that, while they might be nice to have, are not critical to the overall performance of the company. 

But this is a mistake, they say, particularly in an industry desperate for qualified workers. 

Firms need to do everything they can to find new talent, Davis said, particularly developing pipelines into communities that have historically had little representation in the workforce. Diversity initiatives aren’t just a matter of social obligation, he said, they are critical tools to position data center firms for growth. 

“I don't like to predicate this on urgency and on a shortage, but when you are in a shortage, you need to be thinking hard about potentially untapped labor pools,” Davis said. “A lot of operators seem hesitant to invest time and money into something without a really good sense that they're going to get a return. But what’s the risk of doing nothing?”

 

Solutions

While data center firms have thus far placed relatively little attention on racial diversity, there are some in the workforce development space who see the booming industry as a prime opportunity to place young people of color into a technology field.  

TEK Systems and technology education firm Per Scholas partnered in late 2022 to launch a workforce development program to train diverse candidates for data center technician roles. They decided to focus on this area because they saw a 10% increase in data center technician roles caused by the industry’s development boom, Per Scholas Chief Revenue Officer Caitlyn Brazill said, citing job listing data from LinkedIn.

“It was precipitated by the consistent demand and growth we’re seeing in data centers across the country,” she said of the program.  

Photo: Pexels/Field Engineer

The role of technician — employees who maintain the hardware infrastructure inside a data center — is an entry-level opportunity for people to get their foot in the door of the industry. It typically doesn’t require a college degree, but candidates need to obtain certificates showing they have the specific technical skills required to work in data centers. 

This created an opportunity for companies to find and train people from underrepresented communities who were interested in technology but hadn’t been exposed to the data center industry.  

The program, which has now launched in five locations across the U.S., has placed three-quarters of its graduates into data center jobs, and 80% of those graduates have been racially diverse, Brazill said.  

“It’s been really successful in achieving the kind of diversity we like to see,” she said.  

Given that knowledge about opportunities in data centers often spreads through word of mouth, Brazill said the program is encouraging these graduates to serve as “ambassadors” to promote the industry to their communities. 

“Data centers right now have an opportunity to create that flywheel that can get more people of color, more women in the door, succeeding and seeing that economic ability they are looking for, and that will lead to greater word-of-mouth recruitment that can diversify the workforce over time,” she said.  

The more data center jobs become available, the faster that flywheel can turn, and TEK Systems’ Lullen said he sees hiring ramping up. 

“There are organizations we work with that tell us they need to, at the start of 2025, hire hundreds of people a month in various data center locations,” he said.

Many of these hires will be for low-level roles like technicians, so it could take years for those efforts to materialize into more diversity at the higher levels of companies. 

“It will take time to go to the top of the organizations, but from the bottom up there is a huge need for talent,” the anonymous female executive said. 

Two of the largest data center owners, Digital Realty and Equinix, are publicly traded REITs that report their workforce demographics and promote their strategies for increasing diversity.  

According to Bisnow’s annual analysis of diversity at the largest commercial real estate companies, Equinix was among the top 5 of the 20 largest REITs for racial diversity in the C-suite. Digital Realty, however, has zero people of color in its C-suite. Both of the companies declined to participate in an interview for this story. 

Equinix said in investor materials that 27.3% of its global workforce in 2023 was female. Roughly 8% of its U.S. workforce was Black last year, while 14% was Hispanic. All three metrics represented increases from 2022. This March, Equinix hired a female CEO, Adaire Fox-Martin. The REIT says it has partnered with several organizations that extend recruiting channels to marginalized communities, and it has put together a diverse recruiting team to help broaden its hiring practices. 

Digital Realty’s global workforce last year was 25% female, and its U.S. workforce was 11% Black and 14% Hispanic, according to its investor materials. It didn’t say how those numbers compared to 2022. The REIT says it has five employee resource groups for minority populations that have more than 1,000 combined members, and it participates in career fairs to bring in candidates from diverse communities.  

One way that other commercial real estate sectors have sought to bring in more diverse talent at the lower levels has been by recruiting from Historically Black Colleges and Universities. But NTT’s Little said that strategy isn’t as common in the data center industry.  

“The majority of the folks who work in the data center industry don't have four-year degrees,” he said. “It opens it up to where you can enter into underrepresented areas where there are community colleges and those types of programs — maybe non-four-year degree programs — and create a funnel.” 

Another potential solution to push data center firms to increase diversity has emerged at Elea Data Centers. The firm has issued bonds directly linked to sustainability metrics, meaning that if they don’t hit goals like having 40% women in leadership positions, their interest rates increase.  

“That’s something very different that nobody in the industry has done before, at least not that I’m aware of,” Elea’s Costa said. “So we are not just throwing out metrics out there as marketing. We are actually putting our own skin in the game financially and hurting ourselves if we don’t reach those goals.”

But these types of efforts remain few and far between, and Little said he has seen data center companies falling behind the tech industry they do business with in addressing diversity. While some large data center companies like Equinix employ heads of diversity, he said this is rare among smaller firms.  

“Our industry is in a way a part of the broader tech industry, where over the past five years you’ve seen chief DEI officers and the like,” Little said. “That’s not even really a discussion within the data center space.”