Q1 2022 Overview
The North American staffing M&A market opened 2022 with remarkable momentum: 39 announced transactions in Q1 — only slightly below the record pace set in 2021, which had been the most active year for staffing M&A in over a decade. The market entered the year with an extraordinary level of buyer appetite and capital ready to deploy, and Q1 delivered results consistent with that backdrop.
Private equity activity was a defining feature of the quarter: 15 of the 39 transactions involved PE-backed buyers, including seven new platform investments and eight add-on acquisitions. The formation of seven new platforms in a single quarter is a remarkable figure that reflects the depth of financial sponsor conviction in the staffing and workforce solutions space. Each new platform created in Q1 2022 would go on to become an active acquirer of add-on targets in subsequent quarters and years.
IT staffing and consulting and executive search each led all segments with nine transactions apiece — together accounting for nearly half of all Q1 activity. Healthcare and light industrial and commercial staffing each contributed six transactions. The tight labor market conditions across the U.S. economy were a key driver of executive search activity: with unemployment near historic lows, demand for specialized retained and contingency search services was exceptionally strong.
Potential economic headwinds were acknowledged even amid the optimism: a tight labor market, rising inflation, increasing interest rates, ongoing supply chain disruptions, and the Russia–Ukraine conflict. These factors would begin to weigh on deal volume later in the year, but in Q1 they had not yet materially affected the market. Buyer appetite remained, as Akash Taneja observed at the time, at levels not seen in his 15 years covering the space.
“There’s an incredible amount of money that’s still sitting on the sidelines just waiting to be deployed from both strategic and private equity buyers. I cannot recall a time in my 15 years covering this space that buyers were this aggressively looking for acquisition targets. It’s certainly been a seller’s market.”
Akash Taneja, Founder & Managing Partner, Momentum Advisory PartnersSector Highlights
IT staffing and consulting and executive search each recorded nine transactions in Q1 — a joint high-water mark that reflected two distinct but powerful forces: accelerating enterprise technology investment driving demand for IT talent, and the tightest labor market in a generation driving demand for specialized search services. Healthcare staffing contributed six transactions and light industrial and commercial staffing matched that figure. Other professional staffing and multiple professional staffing (firms serving multiple segments) each added three deals. Marketing and creative staffing contributed two transactions and skilled trades recorded one — rounding out one of the most broadly distributed sector mixes in recent memory.
Notable Transactions
A&M Capital Partners invested in P2P Staffing Corp — the parent of TekPartners (IT staffing) and MPLT Healthcare (locum tenens and healthcare staffing) — creating a diversified platform with significant scale across two high-demand segments. The deal represented one of Q1’s most strategically significant PE platform investments. Motion Recruitment acquired MATRIX Resources, a major IT staffing and managed solutions provider, strengthening Motion’s position in technology staffing, telecom managed services, and Agile/DevSecOps consulting. Trilantic North America invested in Addison Group, a national staffing and recruiting firm spanning technology, finance and accounting, non-clinical healthcare, and digital marketing — a broad-based platform investment at a firm approaching significant scale.
What This Means for Staffing Founders
- 2022 opened as a pure seller’s market. Seven new PE platforms, eight add-ons, and nine IT staffing transactions in a single quarter defined a market where buyers were outrunning deal supply. For founders who came to market in Q1 or early Q2 2022, the conditions were among the most favorable in years — maximum buyer competition, elevated multiples, and motivated acquirers.
- PE platform formation is a leading indicator. The seven new platforms created in Q1 2022 didn’t just reflect confidence in the current moment — they created a wave of future add-on buying activity that would play out over the next two to four years. Founders evaluating exit timing benefit from understanding not just current deal volume but the pipeline of motivated platforms actively building.
- Labor market tightness drove executive search to parity with IT. Nine executive search transactions matched IT staffing’s nine in Q1 — an unusual parity that reflects just how extreme the talent shortage environment was at the time. Search and direct-hire firms benefited disproportionately from the tight labor market, and acquirers recognized the earnings power those conditions created.
- Headwinds were visible but not yet felt. Rising inflation, rate hike expectations, and geopolitical uncertainty from the Russia–Ukraine conflict were present in Q1 2022 but had not yet translated into deal slowdown. Q2 would begin to show the effect. Founders who moved quickly in Q1 captured conditions that would not persist through the remainder of the year.