Lately, people have been asking if we know how many staffing firms are going out of business. The answer is we don't know precisely, but we do have some idea thanks to our new monthly staffing survey.
Staffing firms generally don't announce or advertise business closure. Instead, they quietly sell themselves to a surviving competitor. When these sales are large, the acquirer often announces its acquisition. But when the sale is small, no one bothers.
Up until now, there has been no data on small acquisitions. But the advent, a month ago, of the Staffing Industry Monthly Pulse Survey has changed that. One of the questions asks "Did you close an acquisition in the latest month?"
The June survey is, at this moment, still in progress. So far, out of 95 participants, three have responded that they closed an acquisition in June. That amounts to a ratio of 3.2%. Multiply that out by 9,500 staffing firms, and you have roughly 300 acquisitions. Since we have only heard of a few significant acquisitions lately, it can be presumed that these are almost all micro-acquisitions, likely in most cases troubled firms selling due to the current economic environment.
Of course, we have no idea how this compares to a normal month. It may well be that the industry has a high turnover of very small players even in good times.
But 300 acquisitions seems like a lot. Interested in participating in the Staffing Industry Monthly Pulse Survey? For more information, click here.