Q1 2024 Overview
North American staffing M&A opened 2024 with a continued slowdown: 20 announced transactions, a 26% decline from Q4 2023 and a 40% decline from Q1 2023. The quarter extended a downward trend that began in 2023, reflecting both the broader industry's performance and a scarcity of deals coming to market.
IT staffing and consulting and light industrial each led activity with four transactions apiece — a meaningful contrast to prior years when deal flow was more broadly distributed across segments. Notably, healthcare staffing recorded no announced transactions in Q1, a significant departure from its historical contribution to overall volume.
Private equity remained active relative to the overall market: six of the 20 deals involved PE-backed buyers, including one new platform investment by MidOcean Partners in The Re-Sourcing Group and five add-on acquisitions to existing platforms. The ongoing presence of financial sponsors signals continued long-term conviction in the staffing sector despite near-term headwinds.
At the Staffing Industry Analysts Executive Forum in March, we heard a consistent theme: buyers remain interested in acquisitions, but a cautious wait-and-see posture dominates. Sellers who are holding out for 2022 valuations risk missing the window that exists today. The strong jobs report reinforces the Federal Reserve’s likely stance of maintaining elevated interest rates — keeping capital costs high and deal economics challenging for the foreseeable future. We expect activity to remain subdued through mid-2024, with a potential leveling off or uptick beginning in Q4.
“Sellers waiting for 2022 valuations to return may be missing the opportunity that exists today. Buyers are active but selective — and the gap between expectations and reality is the biggest obstacle to deal-making right now.”
Akash Taneja, Founder & Managing Partner, Momentum Advisory PartnersSector Highlights
IT staffing and consulting and light industrial each contributed four transactions in Q1, collectively accounting for 40% of all deal activity. Other professional staffing — spanning engineering, finance, and legal — contributed five deals. Executive search added three transactions. Healthcare staffing was conspicuously absent with zero announced transactions, a notable departure given its historical resilience. The sector mix reinforces a broader theme: acquirers are targeting niche providers with defensible specializations rather than broad-based generalist firms.
Notable Transactions
Three transactions stood out for their scale or strategic significance. Elwood Staffing acquired BelFlex Staffing Network, creating a larger, more geographically diversified commercial staffing provider and marking one of the more meaningful light industrial combinations of the quarter. MidOcean Partners invested in The Re-Sourcing Group, establishing a new PE platform in finance, accounting, compliance, and IT staffing — a signal of financial sponsor appetite for specialized professional services. INSPYR Solutions acquired Advantis Global, expanding INSPYR’s national footprint in technical solutions for Fortune 100 clients and positioning the combined entity as a larger competitor in the enterprise IT staffing segment.
What This Means for Staffing Founders
- The valuation gap is real — and costly. Sellers anchoring to 2022 peak multiples are sitting out a functional market. Buyers are transacting at today’s levels; waiting for a rebound that may not materialize on the same timeline is a risk, not a strategy.
- PE is still writing checks. Six PE-involved deals in a 20-deal quarter represents a 30% participation rate. Financial sponsors remain selective but active — and for founders in the right size range and sector, PE-backed buyers remain a meaningful part of the buyer universe.
- Healthcare’s absence is an anomaly, not a trend. Zero healthcare transactions in Q1 reflects timing and deal flow, not a loss of acquirer interest. Healthcare staffing remains one of the most sought-after segments due to structural workforce shortages — founders in this space should expect strong buyer interest when they come to market.
- Rate pressure is here for the near term. The Fed’s commitment to maintaining elevated rates through mid-2024 means deal financing remains expensive. Well-capitalized strategic buyers have an advantage; founders who want to transact in this environment should prioritize process quality and positioning.