HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS
- Global M&A transaction volumes within the staffing, outsourced services, and software & technology industries (collectively, “Human Capital Management” or “HCM”) declined 12% from Q1 of last year, with 99 transactions completed in Q1 2023. A modest decline in transaction volumes for this quarter reflects the industry outlook for the full year as macroeconomic headwinds continue to negatively influence market activity.
- Strategic buyers continued to dominate M&A activity in this sector, accounting for 93% of industry transactions vs. just 7% completed by private equity groups (financial buyers) throughout Q1 2023.
- Staffing-related transactions represented over half of HCM deals, with 55 transactions completed across professional, industrial, healthcare, and IT-focused staffing firms. This represents a 4% increase from Q1 2022 and demonstrates the continued demand for staffing resources. Outsourcing services transactions, however, decreased by nearly 18% while software & technology transactions realized a substantial 32% decrease since Q1 2022 due to continued macroeconomic concerns. Even with these decreases, the market remains resilient as organizations seek to execute valuable transactions to ensure long-term success.
- North America remained the most active region in Q1 2023 with 48 total transactions representing nearly half of global HCM transactional activity. EMEA and APAC also remained active with a cumulative 49 transactions representing 50% of global HCM transactional activity.