Though overall merger and acquisition volume across the staffing industry landscape was down last year from the multiyear high set in 2015, IT once again led all staffing occupational segments targeted in number of transactions. As detailed in our recently published Staffing Mergers and Acquisitions Annual Report 2016, the number of publicly announced deals involving staffing firms in North America fell to 69 in 2016 from 92 the prior year, both well short of the 126 transactions we reported in 2007 prior to the onset of the Great Recession.

A total of 15 firms that specialize in IT staffing were acquired during the year, representing 22% of all transactions, as compared to the 23 acquisitions in the IT segment in 2015. Relative to commercial staffing, for example, IT continues to garner particular attention from acquirers due in large part to its healthy margins and robust long-term grown potential. Healthcare staffing firms saw the second-most acquisitions in 2016, with 13. Executive/retained search, general staffing (those with more than one segment of operation, typically spanning both professional and commercial occupations) and light industrial staffing firms each accounted for eight transactions on the year.

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Beyond the 69 acquisitions of staffing firms, the report covers 26 acquisitions within North America of “staffing-related” companies, such as job boards, vendor management systems and recruitment process outsourcing providers. We also report inter-regional transactions, involving one firm based in North America and a counterparty based in a different region. There were 15 such acquisitions of staffing firms in 2016, and an additional 12 inter-regional acquisitions of “staffing-related” businesses.

Last year’s downswing in M&A activity was driven primarily by the same headwinds that impacted growth in the US staffing market — namely subpar economic growth and heightened business uncertainty. Historically, recessionary periods have often been immediately preceded by peaks in M&A activity, as we saw most recently in 2007. The year-over-year decline in 2016, therefore, may be a counterintuitively positive signal that the current expansion has appreciable runway remaining.

Corporate members can download the full report here.