M&A activity snapshot
Staffing deal volume is climbing back after two weak years. UHY counted 139 announced staffing deals in 2022, 116 in 2023 and 93 in 2024. A second tracker, Momentum Advisory Partners, counted 111 closed deals in 2025, up from 102 in 2024, though the majority were small, unrepresented and largely discounted. The two firms count differently, so compare each series only with itself.
The turn showed up in early 2026: Momentum recorded 35 announced North American staffing transactions in Q1 2026, the strongest opening quarter in at least three years. The slump tracked demand. BLS temporary help employment fell from 3.16 million in March 2022 to 2.45 million in December 2025, and stood at 2.49 million in September 2026 (preliminary).
The market is fragmented. The American Staffing Association estimated around 27,000 staffing and recruiting companies operating close to 54,000 offices in 2021, its most recent firm count.
Who is buying
Specialized strategics. UHY expects acquisition demand to remain high, particularly for strategic buyers, and notes that most buyers are sector-focused, which makes multi-sector sellers harder to place. Public companies buy to move into higher-margin segments: Kelly acquired Motion Recruitment Partners, an IT staffing firm, for $425 million plus up to $60 million in earnout in 2024.
PE platforms and add-ons. Private equity is most visible in healthcare and IT. Gridiron Capital and Stella Point Capital merged their portfolio companies Travel Nurse Across America and TotalMed in 2025. Capstone also lists Cortec Group's August 2025 acquisition of locum tenens firm MPLT Healthcare among healthcare staffing platform investments.
Antitrust limits at the top. The largest healthcare deals face scrutiny: the FTC said Aya Healthcare's proposed acquisition of Cross Country Healthcare raised significant competitive concerns, and the deal was terminated in December 2025. That pushes large buyers toward smaller add-ons.
What buyers look for
Momentum describes the deals that close as sharing durable client relationships built through the downturn, specialization in hard-to-fill roles, stable gross margins, and a client base diversified enough to withstand demand variability in any single vertical.
Segment mix sets the buyer pool. In Q1 2026, IT staffing and search tied as the most active segments with 8 transactions each, and IT acquirers increasingly prefer firms with statement-of-work and consulting delivery over time-and-materials staffing. Healthcare stays active on clinician shortages: healthcare staffing deals rose 16.7% to 28 in 2025.
Compliance is a diligence line item, not a formality. Light industrial placements carry co-employment and equal-pay exposure that varies by state (see the regulatory note below).
What makes a strong company
Staffing firms that clear a buyer's bar typically show:
- Gross margin that has held through the 2023-2025 downturn, with the bill/pay spread documented by client and segment.
- No single client large enough to swing the business. Buyers test concentration by top-1 and top-10 client share of gross profit.
- A specialty in hard-to-fill roles (IT, healthcare, skilled trades, executive search) rather than general commercial staffing.
- Recruiters and account managers tied to the company, not to the founder, with non-solicitation agreements in place.
- Clean state registrations, workers' compensation history and payroll tax records.
Regulatory note. New Jersey's Temporary Workers' Bill of Rights requires temporary help service firms to be certified by the Division of Consumer Affairs, and firms that place workers in covered light industrial categories must post a surety bond of not less than $200,000. Illinois requires equal pay once a temporary worker has been assigned to the same client for more than 720 hours in 12 months. Rules like these cut margins on industrial placements, which is one reason that segment trades at the bottom of the multiple range.
Valuation and deal structure
No data provider publishes pure-staffing private-market multiples by size band. The most cited reference is UHY's rule of thumb for companies with $3-4 million of EBITDA: 4.0x-4.5x for lower growth/margin light industrial and commercial firms, 5.0x-6.0x for professional staffing, and 5.5x-7.0x for high growth/margin healthcare, life sciences and IT firms. Larger, disclosed deals run higher: Capstone puts average healthcare staffing EV/EBITDA at 9.9x for 2021 through 2025.
Structure matters as much as the headline multiple. UHY reports that cash at close in a marketed process tends to be 70-80 percent, while one-off negotiated deals can see as little as 20-30 percent at close. Momentum adds that earnouts and deferred consideration have become standard for anything that does not meet a narrow set of criteria. Kelly's Motion Recruitment earnout, based on a multiple of gross profit above an agreed amount, is a typical design.
For a first range on your own firm, use the Axia valuation tool.
Outlook
Demand is stabilizing. The American Staffing Association reported that the year-over-year decline in staffing employment narrowed to 4.6% in Q1 2026 from 10.8% a year earlier, and it expects year-over-year growth in later 2026 quarters. If that holds, more owners who waited out the downturn will come to market in 2027.
Buyers are likely to stay selective. Expect continued interest in IT, healthcare and search, and continued use of earnouts for general and light industrial firms. AI is a stated reason some founders are exploring a sale, though Momentum calls that concern largely premature, since the contraction has been primarily a demand story, not an automation story.
Part of Professional Services M&A. See also: trigger-based deal sourcing for buyers watching a cyclical market.