HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS
- Global M&A transaction volumes within the Staffing, Outsourcing Services, and Software & Technology industries (collectively, “Human Capital Management” or “HCM”) declined 26% from Q4 of last year, with 101 transactions completed in Q4 2022. Even with this decline, 2022 M&A volume has outpaced all prior years, excluding 2021, as M&A persisted despite the emergence of broader macroeconomic headwinds.
- Strategic buyers continued to dominate M&A activity in the sector, accounting for 91% of industry transactions vs. just 9% completed by private equity groups (financial buyers) throughout Q4 of 2022.
- Staffing-related transactions represented nearly half of HCM deals, with 49 transactions completed across professional, industrial, healthcare, and IT-focused staffing firms. All sectors of the HCM industry followed similar trends in Q4 2022, as Staffing transactions decreased by 9% and Outsourcing Services transactions were down 46% in comparison with Q4 of last year. Additionally, Software & Technology transactions realized a 23% decrease due to continued 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 Q4 of 2022 with 56 total transactions representing over half of global HCM transactional activity. EMEA and APAC also remained active with a cumulative 45 transactions representing 45% of global HCM transactional activity.