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 15% from Q2 last year, with 106 transactions completed in Q2 2022. Even with this decline, 2022 M&A volume is on track to outpace all prior years, excluding 2021, as participants are emphasizing the need for HCM following the industry problems faced during COVID-19.
- Strategic buyers continued to dominate M&A activity in the sector, accounting for 89% of industry transactions vs. just 11% completed by private equity groups (financial buyers) throughout Q2 of 2022.
- Staffing-related transactions comprised the majority of HCM deals, with 57 transactions completed across professional, industrial, healthcare, and IT focused staffing firms. The HCM sectors had mixed results in Q2 2022, as Staffing transactions were down only 5% and Outsourced Services transactions were down 24% in the second quarter of 2022 from Q2 of last year. Similarly, Software and Technology transactions realized a 25% decrease due to growing macroeconomic concerns. Even with these decreases, the market remains strong as these comparisons are against the record year of 2021.
- North America remained the most active region in Q2 of 2022, with 63 total transactions representing 59% of global HCM transaction activity. EMEA also remained active with 32 total transactions representing 30% of global HCM transaction activity.
