Human Capital Management M&A Pulse – Q2 2023

HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS

• Halfway through 2023, the Human Capital Management industry has remained steady despite the forecasted 3.2% reduction in market size. The travel nursing segment is shrinking, as anticipated, following a post-pandemic surge while optimism continues to surround the IT, healthcare, and professional staffing sectors as higher margin, value-added services.
• Macroeconomic headwinds continue to pose significant challenges to the Human Capital Management industry as high interest rates, record inflation, and ongoing geopolitical tensions remain top-of-mind as precursors to a potential recession. The U.S. economy’s risk averse attitude lends itself to subdued performance in the Staffing industry with the Bureau of Labor indicating temporary help employment is down 3.1% from average over the first half of 2023.
• Optimism remains prevalent, however, as the U.S. Staffing industry maintains a high plateau of temporary staffing hours worked in professional occupations. This implies that opportunity exists for competitive staffing firms taking advantage of more widely accepted “contingent” work agreements. Employers continue to report difficulties retaining talent, keeping the Human Capital Management industry in focus despite an unclear outlook for the remainder of the year.