M&A activity in IT staffing jumps during the third quarter

Per SIA’s M&A Database, there were 15 transactions in the IT segment (acquiring firm is an IT staffing firm) in the third quarter, tied with the fourth quarter of 2016 for the most in any quarter since we started tracking transactions in 2014.

Thanks to the strong quarter, there have already been 30 acquisitions of IT staffing companies this year, meaning 2022 has a chance to end with the most IT staffing transactions of any year in our tracker (the high at this point is 36 in 2015).

Of note, three companies with IT staffing revenue that appear in the top 15 of our Largest IT Staffing Firms in the US 2022 list were involved in acquisitions in the third quarter: Randstad (Finite Group), Disys (Make Corp.) and Eliassen Group (Foothills Consulting Group).

And the transactions were not just seen in the US; five of the 15 reported transactions came outside of the US (one being in Canada).

This follows second quarter in which we recorded only six total IT staffing transactions. The big jump could signal a desire to take advantage of the prolonged need for IT talent among companies.

In the September Pulse Survey, we saw that August IT temporary staffing revenue was up a median 13% year over year. Although second-half comparisons are becoming more difficult, growth will persist as orders pour in. A net 50% of IT staffing respondents reported that they expect an increasing trend in new orders over the next six months, nearly double the net 26% that saw an increase in new orders over the last three months.

Meanwhile, third-quarter earnings releases are starting to shed light into the continuing strength of IT staffing. Kforce Inc. (NASDAQ: KFRC) reported that third-quarter Tech Flex revenue was up 15.7% year over year. And ASGN Inc. (NYSE: ASGN) reported high single-digit growth in IT staffing services in the quarter, with On Assignment division revenue up 7.5% year over year.

To see October IT staffing trends, be sure to participate in the November Pulse; keep an eye out for the invite at the beginning of the month, or visit our Surveys page.