HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS
- Global M&A transaction volume within staffing, outsourcing services, and software and technology industries (collectively, “Human Capital Management” or “HCM”) declined 11% in Q1 of 2022 from last year, with 110 transactions completed in Q1 2022. The continued recovery from the COVID pandemic resulted in a record year in 2021, followed by a gradual decrease in Q1 2022 transaction volume as the industry started to encounter macroeconomic challenges.
- Strategic buyers continued to dominate M&A activity in the sector, accounting for 92% of industry transactions vs. just 8% completed by private equity groups (financial buyers) throughout Q1 of 2022.
- Staffing-related transactions comprised the majority of HCM deals, with 50 transactions completed across professional, industrial, healthcare, and IT focused staffing firms. Most sectors of the HCM industry slightly declined to normalized levels in Q1 2022, as Staffing transactions were down only 2% and Outsourced Services transactions were down 7% in the first quarter of 2022 from Q1 of last year. Software and Technology transactions, however, realized a 24% decrease due to a decline from previous record high technology demand which was due to the initial shift to a distributed work force environment.
- North America remained the most active region in Q1 of 2022, with 61 total transactions representing 55% of global HCM transaction activity. EMEA also remained active with 36 total transactions representing 33% of global HCM transaction activity.