Trouble on the fringes: How the cloud will commoditize the upper middle class

During the Great Recession of 2008, companies looked to slash costs in every area possible. Organizational headcount bore the brunt of this cost cutting, with over 7.9 million jobs lost, many to never return.

A recent three-part AP report analyzed employment data from 20 countries, and several industries, and found that technology is replacing workers in both established companies as well as small businesses. The report found that the most vulnerable workers were those that followed well-defined procedures that were executed on a repeated basis. Jobs such as factory and warehouse workers, paralegals, payroll administrators, office assistants, and retail salespeople are but a few of the repetitive jobs that developers can write code for.

While eliminating repetitive middle-class jobs through software automation seems to be inevitable, a dire future also lies in wait for many upper middle-class jobs requiring higher cognitive skills. An increasing commoditization of their skillset will occur through cloud-based technologies. This commoditization will start on the ‘outer bands’ of employee functions, and slowly work its way to the core of the company’s most skilled employees. In the first of this two-part series, I’ll examine how certain highly skilled jobs in sales, marketing, and HR will slowly fade away due to advancements in cloud technologies.

Elimination of sales roles within SaaS companies through UI advancements CEO Marc Benioff at Salesforce1 event. CEO Marc Benioff at Salesforce1 event.

Software-as-a service applications took off because of the allure of self-service and speed. Led by the growth of the customer relationship management (CRM) category, SaaS applications have slowly penetrated into every other functional area of the enterprise – enterprise resource planning, collaboration, marketing automation, HR, and accounting, to name a few. Small and medium-sized businesses were the first ones to adopt SaaS applications because of the ease with which they could peruse the editions, and start subscribing to them with nothing more than a credit card.

As SaaS applications today penetrate more of the enterprise, companies selling them needed experienced sales reps to explain more complex, value-added functionality, and upsell customers on those features. However, as SaaS platforms have matured, the user interface has become front-and-center in many of these applications, and users are able to learn even the most advanced features in a matter of days due to the intuitive nature of the UI. Coupled with “in-app” demos, and easy access to pricing on the website, the roles of these sales reps are rapidly being relegated to routine “order taking” administrative duties, as opposed to strategic solution selling. With several self-service mechanisms gaining ground within SaaS applications, it is not hard to see that these sales roles will become one of the first to get downsized. There will still be a place however, for sales roles in companies that sell complex systems since sales cycles for such systems require reviews by several stakeholders. However, with the mass movement to the cloud, companies selling these kinds of complex systems will by and large be in a niche category.

Downsizing of demand generation marketers

Within marketing departments, demand generation and product marketing managers work hand-in-hand. Most employees who deal with demand generation spend a majority of their time within cloud marketing automation systems. These systems help with targeting prospective customers through multiple channels, be it email, website, or social media, and to “score” the ones with the highest potential to purchase the company’s products.

Existing customers are also targeted with “campaigns” designed to upsell and cross-sell them on other product lines. Demand generation marketers also spend a significant portion of their time with online SEO and paid search. An analyst report from October 2011 cited that an inordinate amount of time was being spent preparing such data instead of analyzing it. However, with the passage of time, marketing automation systems will eventually automate the crucial first step of data preparation. Simultaneous advancements in the area of predictive analytics will mean that much of the slicing and dicing of customer data for targeted campaigns will get much easier such that regular product marketers can perform these functions on their own, and create the appropriate content for specific campaigns.

HR will transform into “cultural officers”


HR is one of the most diverse departments within any company, covering a range of different skillsets. The three primary functions within HR are recruiting, benefits, and performance management. With more of our economy being powered by knowledge workers, it is important to accurately calculate, analyze, and forecast all metrics associated with employees. Cloud-based human capital management (HCM) vendors integrate the benefits and performance management aspects of HCM so that it is very easy for line managers as well as finance personnel to calculate the ROI per employee.

Because of the rapidly iterative nature of cloud applications, future innovations such as incorporating industry benchmark data into HCM benefits modules are not far away. Then software will use that data to alert management of any potential churn of high-value employees so that the business can retain them. Thanks to the seamless integration between such benchmark data, benefits modules, and the core ERP system, finance managers can perform many of the duties of benefit analysts, and the finance department will assume the duties of defining and modifying future benefits and pay packages.

On the recruiting front, Marc Andreesen believes that LinkedIn will upend the recruiting industry. As LinkedIn grows, expect more hiring managers to be directly involved in the recruitment process of candidates. With millennials demanding more openness from employers, and employers demanding more proof of abilities, LinkedIn will rapidly add features where potential candidates can showcase more of their work and personal characteristics, and potential employers can reveal more of their culture. Built-in optimization algorithms will then match employers and candidates in a manner similar to many of today’s dating sites.

With the gradual phasing out of their positions, corporate recruiters and benefits analysts will retool their skills to function more as “Cultural Officers,” a role where they play an active part in defining the culture of the company, as well as ensure that all legal compliance with regards to recruiting candidates are followed by hiring managers.

What’s next?

We’ve examined how roles within so-called “outer functions” such as HR, sales, and marketing will be eliminated by rapid advancements in cloud technologies. But what about departments like legal and finance? Upper middle-class roles such as financial analysts, and lawyers will still exist because of the highly complex nature of their jobs.

Companies need to maximize shareholder value through mergers and acquisitions, and also protect their intellectual property – these requirements are well served by finance and legal departments. As for “core” functions such as product management, IT, and R&D, we’ll explore the impact of cloud technologies on those occupations in the second piece of this series running Sunday.

Ashwin Viswanath does product marketing at Informatica, within the cloud business unit. The opinions expressed in this article are his own and do not represent those of his current or past employers. You can follow Ashwin on Twitter at Ash__V.

HR image source: flickr user DaveBleasdale