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 6% from Q3 of last year, with 99 transactions completed in Q3 2022. Even with this decline, 2022 M&A volume is on track to outpace all prior years, excluding 2021, as participants continue to embrace M&A as a cornerstone of the HCM industry.
- 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 Q3 of 2022.
- Staffing-related transactions comprised nearly half of HCM deals, with 49 transactions completed across professional, industrial, healthcare, and IT-focused staffing firms. The HCM sectors had mixed results in Q3 2022, as Staffing transactions increased by 4% and Outsourced Services transactions were down 15% in the third quarter of 2022 in comparison with Q3 of last year. Similarly, Software and Technology transactions realized a 13% 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 Q3 of 2022 with 49 total transactions representing nearly half of the global HCM transaction activity. EMEA also remained active with 39 transactions representing just under 40% of global HCM transactional activity.