Q3 2026 Overview
Q3 2026 closed with 20 North American staffing and recruiting transactions, down from 26 in the second quarter and 35 in the first, and up from 16 in Q3 2025.
On volume alone it was the quietest quarter of the year. We don’t read it as a negative quarter. The makeup of the list, the performance of the broader industry, and what we’re hearing from buyers and founders all point in a better direction than the headline count.
The industry itself is in better shape than at any point in the past three years. SIA now forecasts US staffing revenue to grow 2.4% in 2026 to $183.1 billion, raised from 0.8%, which would be the first year of growth in three years. Staffing hours tracked by the SIA | Bullhorn Staffing Indicator were running 11% ahead of last year in early October, with industrial hours up 17%, and SIA’s Pulse survey showed median revenue up 5% in August, the highest reading since late 2022.
Third quarter results from the public companies told the same story. ManpowerGroup grew 5.2% in constant currency and called 2026 an inflection point, Randstad’s North American business grew 9% organically, and Robert Half’s talent solutions business grew year over year for the first time since 2022. M&A tends to trail operating performance. Buyers want to see improvement hold before they pay for it, and sellers who are finally posting better numbers have reason to let another quarter or two show up in their trailing results.
Fewer Deals, Familiar Buyers
The more encouraging signal is who was on the list. Familiar acquirers that had gone quiet came back: Aerotek acquired The PAC Group, ALKU made its first acquisition in nearly ten years, and CHG Healthcare and Care Career continued to add capacity. Light Industrial/Commercial, which produced a single transaction in our Q2 2026 report, recovered to four, almost all of it in skilled trades and data center labor, where demand is strongest.
Outside the published data, the change in tone has been noticeable. Over the past quarter we’ve seen a steady increase in buyers reaching out to learn what we’re working on and to make sure they’re on our radar, along with a stronger inflow of quality businesses considering a sale than at any point earlier in the year.
“Momentum is the busiest it has been in two years in active mandates. That’s anecdotal, and we treat it that way, but two of the four signals we named in April have started to show up.”
“Industry performance, buyer appetite, and the quality of businesses coming to market are moving in the same direction, and we are encouraged about 2027.”
Akash Taneja, Founder & Managing Partner, Momentum Advisory PartnersSector Highlights
IT Staffing and Consulting led all segments with five transactions, 25% of the quarter. ALKU acquired Philadelphia AI and data consultancy rockITdata, Kyndryl acquired Healthcare IT Leaders for up to $350 million including an earnout, and CTI Staffing described its acquisition of PeopleSERVE as the first of a planned series.
Healthcare followed with four transactions. Knox Lane’s $437 million take-private of Cross Country Healthcare closed in July, the largest deal of the quarter, with the locum tenens division combined with Knox Lane’s All Star Healthcare Solutions. CHG Healthcare added KREWE Anesthesia, Care Career completed its seventh deal in two years with MAS Medical Staffing, and Philips International made its first healthcare staffing acquisition.
Light Industrial/Commercial was the only segment to grow, rising from one transaction to four, including Concord Holdings’ acquisition of Paramount Placement and VeriWorks’ carve-out of LaborWorx, both in skilled trades. Other Professional also produced four, among them Aerotek’s acquisition of engineering services firm The PAC Group and Airswift’s purchase of three New Tech Global business lines. Search produced three, including Jobplex’s second deal of 2026, Ascension Sports Partners.
Two transactions that closed in June, Epitec’s carve-out of TalentBurst’s IT, engineering and government units and AnDek Holdings’ acquisition of Employ Partners, were announced after our Q2 report was published and are included in the Q3 count.
What Is Still in the Way?
Private equity remains relatively quiet. Sponsors were behind several of the quarter’s deals, including the Cross Country take-private, but we have not seen a broad return of add-on activity. Many sponsors are still working through an exit backlog. PitchBook counts roughly 11,000 PE-backed companies held for five years or longer, and 2025 was the weakest year for PE fundraising since 2018. Until sponsors can return capital from existing investments, new platform and add-on activity will stay selective.
The cost of capital is the second constraint. Rates remain an obstacle, financing is more expensive, and it is taking longer to put in place. Financing has delayed transactions this year and is lengthening the time from letter of intent to close. On pricing, quality businesses have continued to trade at strong valuations and on favorable terms. There simply haven’t been many of them, and we don’t yet have evidence of how a larger supply will affect pricing.
What This Means Going Forward
In our Q1 2026 report we identified the four signals that would change our view. Two have started to emerge:
- A broadening of buyer criteria. Emerging. Familiar acquirers returned in Q3.
- More quality deal flow reaching advisors. Emerging, based on what we are seeing in our own pipeline.
- Increased private equity add-on activity. Not yet. Private equity remains selective.
- Some easing of the macro headwinds. Not yet. Financing costs are still elevated.
The fourth quarter opened with Elwood Staffing’s acquisition of CoWorx, an industrial staffing firm with roughly $183 million in revenue and 45 locations. Given what we saw in Q3, Q4 could be a good quarter, and we expect the buyer interest and seller activity we’re seeing now to show up as higher closed volume in the first half of 2027 as processes started this fall reach the finish line.
We remain cautious. There have been several head fakes over the past couple of years, and financing costs could slow the timing. But industry performance, buyer appetite, and the quality of businesses coming to market are moving in the same direction.
Sources: Momentum Advisory Partners proprietary research, SIA, SIA | Bullhorn Staffing Indicator, ASA, PitchBook, company filings.