In today’s fast-changing business world, companies are facing new challenges—higher employee expectations, stricter regulations and rapidly changing technology like artificial intelligence (AI). HR teams and service bureaus—like administrative services organizations (ASOs), professional employer organizations (PEOs) and payroll service providers (PSPs)—play a key role in helping businesses adapt and stay competitive. 

To understand how service bureaus are managing these challenges, we surveyed them about their goals, challenges and plans for the future. Here’s what we found. 

Hesitation to Offer New HR Tech 
Despite clear client demand, 80% of service bureaus aren’t offering new HR technology solutions from their human capital management (HCM) vendors. What's behind the hesitation? The top reasons these companies hold back from releasing their HCM partner’s new offerings to their clients are: 

1. Lack of confidence in early-stage product releases 
2. Lack of client demand  
3. Complexity of implementation 

This gap between clients' needs and current service offerings presents a great opportunity for growth. Service bureaus that embrace new tools—like AI-powered virtual assistants or predictive analytics—can set themselves apart and meet the needs of clients looking for more advanced solutions. 

Gaps Between Client Needs and Services 
There’s often a disconnect between what employers believe their employees want and what employees actually need. isolved’s annual surveys show that 55% of business owners feel employee expectations are “out of control,” but only 24% of HR leaders agree. This gap can make it challenging for businesses to find the right balance. 

This is where service bureaus can step up. Offering tools like employee feedback platforms or engagement surveys can help your clients get a clearer picture of their workforce’s true needs, making it easier to meet expectations. 

Clients Outgrowing Current Platforms 
As companies grow, they often need more advanced tools to manage their workforce. The top reason clients look for a new ASO, PEO or PSP is because they’ve outgrown their current platform. 

For example, while 54% of ASOs, PEOs and PSPs offer standard HR analytics, only 32% provide predictive analytics and benchmark insights. With HR analytics being the number-one area of investment for HR leaders this year, there’s an incredible opportunity for service bureaus to invest in broader analytic capabilities.  

Top Challenges for Service Bureaus 
Right now, the top business concern for service bureaus is acquiring new clients. To stay competitive, it’s important to partner with an HCM vendor that provides strong support, marketing resources and tools for easy implementation. The right partnership can help you expand your offerings and stand out in the marketplace. 

The top five challenges service bureaus face are: 

1. Acquiring new clients 
2. Training and developing employees 
3. Keeping up with competitors with software and services 
4. Keeping up with competitors with marketing and sales 
5. Attracting and retaining talent 

Addressing these challenges requires a strategic approach. Investing in employee development, marketing and new tools can help you stay ahead of competitors while keeping your team and clients happy. 

Where Service Bureaus Are Investing 
Service bureaus are starting to invest in new tools to keep up with evolving client needs. The top five HR technology offerings they’re most interested in adding in the next year are: 

1. Safety, risk and compliance tools 
2. AI-based virtual assistants 
3. Nothing—some service bureaus believe these offerings wouldn't interest their clients  
4. Predictive analytics and benchmark insights 
5. Employee engagement tools and surveys 

Now is the perfect time for service bureaus to offer new tools that help clients navigate today’s complex business landscape. As regulations get more complicated, clients need solutions that offer data-driven insights, risk management and compliance support. 

Ready to Learn More? 
Want to stay ahead of your clients' needs? Download the full Pendulum of Opportunity report for actionable insights to help your organization grow. 

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