Rise in US recruitment market predicted in 2025

A rise in mergers & acquisitions in the US recruitment market is anticipated next year in the wake of the US presidential elections next month.

A corporate finance leader has predicted an increase of activity in the US recruitment market, among other sectors, which is also driven in part by anticipated tax policy changes.

This will be an improvement over conditions in the US market over the last few years, with a significant drop in M&A activity and pricing in 2021, driven by private equity’s reduced involvement and debt market constraints. Despite this, fundraising remained strong with $140bn (£107bn) in “dry powder” waiting to be deployed, said Matt Jamison, managing director of US operations for Corporate Finance International. 

PE funding plays less of a role in US M&A than in Europe overall, with PE accounting for about 10% of US M&A deals, Jamison said, but he went on to suggest that more PE money will be placed in the US business-to-business sector in “a little shift here, and in the discussions with funds we’ve been having”. He said: “As we’re looking at deals, we’re actually seeing an increase or at least people are starting to assess it more.”

But in terms of US M&A activity generally, Jamison predicted: “You’re going to see every seller, every person that is thinking about selling in the next three or four years coming to market next year, and that’s going to be in all industries, including yours [recruitment/staffing and HR].

“And so there’s going to be a significant level of that activity… which is going to drive pricing, transactions. You’re going to see a big increase in M&A, and in the market in general.”

Jamison was speaking at the Corporate Finance International (CFI) HR Conference in Amsterdam. Most speaker content focused on activity in the Benelux countries, but Jamison offered a US perspective on M&A activity. 

He highlighted a trend of staffing companies “trying to position themselves as technology companies more and more, and trying to get that multiple on the technology side, but most of them are not technology companies, and they’re not getting them [the multiple]”.

He also commented on the trend of overseas European buyers going into the US to invest in businesses there. “They have not done particularly well lately in acquisitions. I think there’s been a disconnect between the [US] sellers’ expectations, what they want, and what – quite honestly – international buyers won’t want to pay.”

However, he added that he and his team expect to see more international business increase: “We’re cautiously optimistic. I think everybody’s kind of wondering what’s going to happen, but I think overall, it will go fairly well for the industry and M&A, and hopefully, we’ll be able to do a lot of deals next year.”

• See the upcoming Nov-Dec issue of Recruiter for more insights from the CFI conference.

• Comment below on this story. Or let us know what you think by emailing us at [email protected] or tweet us to tell us your thoughts or share this story with a friend.

Randstad data reveals widening of the AI skills gap

New research from Randstad has suggested that AI inequities stand to worsen labour shortages if left unchecked.

12 November 2024

APPOINTMENTS: 11-15 NOVEMBER 2024

This week’s appointments include: Codatech, HR Star, Morgan McKinley, Org Group

People 12 November 2024

NEW TO THE MARKET: 11-15 NOVEMBER 2024

This week’s new launches include: ERSG, NRL

New to Market 12 November 2024

Haatch invests in recruitment streamlining platform TalentLynk

TalentLynk, a cloud calling and AI-powered communication platform, has secured £335k in pre-seed funding from established UK investor Haatch.

Contracts 12 November 2024
Top