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Report:

M&A Market Review: Recruitment sector

12 February 2020

2020 Annual Recruitment Market review

BDO's latest Mergers & Acquisitions review of the recruitment sector looks at deal activity and industry trends in the recruitment market in 2019. The latest report shows the sector has remained resilient and attractive to investors through 2019 despite the economic uncertainty.

The recruitment market grew by 5.5% in 2019, to £13.9bn – a gradual deceleration over the last couple of years, but beating its 2.8% forecast growth.

Global deals have increased from 2018 to 2019 by 17%. The UK has remained an attractive market for investment, but with UK deal level falling from its six year high in 2018 it has been overtaken by the US which ranked No. 1 for M&A activity. With a strong focus on technology investment in the sector, transactions related to recruitment software and platforms accounted for 23% of all deals.

In the UK, unemployment rates reached a 44 year low in March 2019. However, it seemed over the summer months that as the final Brexit date approached, business confidence was muted and unemployment began to rise. The recruitment sector remains closely aligned to the direction of travel of the wider economy and so greater certainty post-election has seen a return to higher valuations and is anticipated to spark activity.

What’s in store for recruitment firms in 2020?

In our report alongside a full review of M&A activity we also discuss:

  • The war for talent in a post-Brexit world and how firms can plan for this
  • The wide variety of remuneration and recognition schemes available for recruitment firms to consider for their own employees
  • The extension of IR35 to the private sector and its impact
  • Insights from three industry operators: Vector Resourcing, Encore Personnel and Hydrogen Group Plc.

READ OUR 2020 REPORT

If you would like to discuss any of the content in this report or any other business related issue, please do get in touch.

2019 Mid-year Recruitment Market snapshot

BDO’s mid-year market snapshot monitors deal activity in the recruitment market in the first half of 2019. Figures to date this year show that the activity levels have been maintained despite some challenging macro-economic conditions and this has been fuelled particularly by UK companies seeking international opportunities.

TELL ME MORE

Previous M&A annual reports and market snapshots for the recruitment sector: