Hourly Rate PEO Pricing Explained: Part 2 of 4

From overseeing payroll and benefits to maintaining legal compliance and implementing policies, the list of tasks you face as an HR leader is endless. Yet, they’re essential to running your organization, no matter how much time and effort is tapped in the process. Learn more about the hourly rate PEO pricing arrangement.

Rather than put it all on the shoulders of your human resources team, you can partner with a Professional Employer Organization (PEO) to enlist comprehensive HR support. This allows you to focus on more strategic initiatives that drive business results.

When evaluating PEO partnerships, one of the most common questions is around pricing models. There are several options, and in this article we’ll explore the value of PEO hourly rate fees. This transparent structure gives you exceptional flexibility while accessing specialized expertise.

How PEOs Determine Hourly Rates

PEOs customize hourly rates based on the specific services utilized and level of expertise required. Fees typically range from $100-$200 per hour.

An image symbolizing an hourly rate model.

Exact rates depend on key factors like:

  • Service complexity – Highly complex needs like compensation analysis demand higher rates than basic HR administration.
  • Expertise level – Hours from senior HR experts with 20+ years of experience cost more than generalists with around 5 years.
  • Location – PEOs adjust for local labor markets, with higher rates in major metro areas.
  • Additional costs – Some services incur supplementary costs that could be incorporated into hourly fees.
  • Volume discounts – PEOs may offer discounted hourly rates for 500+ hours per month.
  • Service bundles – Bundling core offerings like payroll can warrant more attractive overall pricing.

By weighing these variables, PEOs develop customized hourly rates tailored to your organization’s specific needs.

Common PEO Services Billed Hourly

Typical PEO services charged by the hour include:

  • HR consultation – Strategic guidance on policies, compliance, organizational change, employee relations, and more
  • Training and development – Needs assessment, program design, training delivery, coaching, and analysis
  • Recruiting and staffing – Sourcing, screening, interviewing, assessments, onboarding, and background checks
  • Payroll processing – Payroll preparation, tax payments, earnings statements, and quarterly/annual filings
  • HR administration – Employee record-keeping, HRIS data entry, PTO tracking, performance reviews, attendance, and more
  • Workplace investigations – Planning approach, conducting interviews, analyzing findings, documenting conclusions, and issuing recommendations
  • Compensation analysis – Job description review, benchmarking, pay equity analysis, bonus design, and updating pay structures
  • Custom training – Developing specialized programs on customer service, sales, leadership, compliance, diversity, and inclusion

Benefits of PEO Hourly Rate Pricing Billing

Beyond the sheer time savings, partnering with a PEO at hourly rates provides:

  • Cost flexibility – Only pay for the specific services used each month for greater budgeting control.
  • Scalability – Easily add or reduce services to match changing business needs.
  • Customization – Tailor support to address unique priorities and challenges.
  • Specialized expertise – Access senior specialists for complex projects without having to hire them full-time.
  • No long-term commitment – Test the partnership before making a major investment.

For many HR teams, PEO hourly fees offer the optimal balance of value, flexibility, and customization.

Choosing the Ideal PEO

Vet potential PEOs by asking:

  • What is your hourly rate range by service type and expertise level?
  • How do you determine hourly rates?
  • What could cause rates to change?
  • Do you offer discounts for high volumes?
  • Can we pilot select services before scaling up?
  • What are typical hourly volumes for clients our size?

With these insights, you can evaluate if a PEO’s hourly pricing aligns to your budget and objectives.

Bring Strategic HR Support Within Reach

While HR is highly demanding, PEO hourly rates allow you to cost-effectively outsource select functions. This lets you focus on driving organizational success. Investing time and effort in prioritizing a partnership that fits your evolving needs saves that time and effort for strategic initiatives that elevate your HR leadership and grows the business you want to succeed.

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