Navigating the M&A landscape: Strategic survival in 2025
Staffing Industry Review
Navigating the M&A landscape: Strategic survival in 2025

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After a second straight year of sluggish M&A activity, dealmakers say they’re optimistic about a rebound in 2025.
Why so hopeful? Some say employment growth and interest rate cuts in the US and Europe have boosted confidence. Others say the new US presidential administration will usher in a business-friendly regulatory and tax environment, marked by cuts in corporate taxes.
Staffing leaders, too, say they have high hopes for their firms’ growth as well as the potential for alliances.
Following a 9% decline in 2024, the Americas staffing market is expected to grow 5% in 2025, according to SIA’s Americas Staffing Market Forecast November 2024 report.
“Both small and large firms will continue to look for more ways to serve their clients and grow faster in 2025 — M&A can often create significant opportunities,” says Thomas Moran, CEO of Addison Group, one of the largest US staffing firms. Moran adds that, anecdotally, he has observed that well-capitalized strategic partners are poised to strike deals.
This relative bullishness comes after two years of M&A declines. After 139 staffing deals that involved North American firms in 2022, that number slipped to 116 in 2023, according to SIA’s Merger and Acquisition Trends: North America 2024 Update report. As of Dec. 4, 2024, there were only 94 deals reported, according to SIA.

Regardless of what 2025 brings, dealmakers need good strategies to handle the unexpected, such as geopolitical and economic turmoil and tech disruption. This makes risk mitigation a top priority for the year.
To maximize the chances of success, here are elements all key players should consider.
The Evolution of Due Diligence
In M&A, the classic advice to perform due diligence bears a fresh look: It’s evolved along with changing business conditions.
“Due diligence remains the most critical step in mitigating risks,” says Akash Taneja, founder and managing partner of Momentum Advisor Partners. “By explicitly evaluating vulnerabilities related to geopolitical tensions, inflation and supply chain disruptions, buyers can better understand the potential challenges they may face post-acquisition.”
Yet due diligence now extends beyond traditional accounting, legal and operational assessments.
Today’s buyers are scrutinizing critical areas such as customer sustainability and profitability, misclassification risks in professional staffing, cybersecurity vulnerabilities, restrictive covenants, and state and local tax implications.
Among these priorities, cybersecurity has risen near the top. Last year, numerous staffing companies filed data breach notices, including Amergis Healthcare Staffing and Express Employment Professionals.
“It’s a career-limiting mistake for the people in charge of acquisition diligence to have missed a foreseeable cybersecurity issue that leads to a breach,” Andrew Brown, managing director of Fairmount Partners, says. One example: Inadequate insurance coverage results in substantial remediation costs, which can erode or erase the value sought from the original deal itself, Brown warns.
Stephanie Wernick Barker, president of staffing firm Mondo, agrees that staying on top of ever-changing vulnerabilities is vital.
“Cybersecurity … is no longer just about devices and physical property and cloud data,” she says. “It’s now about AI and new types of attacks that happen every single day. Data has never been more easily accessible, making it more dangerous than ever.”
Fortunately, emerging technologies can help streamline the due diligence process. AI, for example, can speed up the review of documents and assess critical data points leading to a more productive process than in the past.
Retaining and Motivating Talent
Another key to risk mitigation is retaining and incentivizing key employees.
Starting with a people-first mentality has surprising benefits, even in uncertain times, experts say.
“Retaining the acquired company’s workforce is one of the most important drivers of post-deal success,” Taneja says. “Buyers should avoid making significant changes during the first several months following an acquisition to prevent operational disruption.”
It’s also important to provide competitive and transparent compensation structures to boost employee satisfaction and retention, Taneja adds.
Alan Bugler, managing director of Citizens M&A Advisory advises buyers to assess the culture of the company they seek to acquire and compare how relatable it is to their own.
“If they are drastically different, you may be setting yourself up to fail from the beginning,” Bugler said. “Being thoughtful and proactive around client communication will help ease transition concerns.”
The advice also applies to integration, Bugler says. “Be thoughtful and don’t rush.”
Indeed, integration is often overlooked, according to Peter Sanborn, VP of strategy, corporate development and partnerships at Upwork, which acquired Objective AI in 2024.
Be sure to incorporate elements of the acquired company and foster cross-pollination of talent, Sanborn says. “Transparent communication is equally vital — clearly articulating the vision behind the acquisition, the acquired team’s role and any changes they can expect, ensuring buy-in from the outset,” he adds.
Also provide growth opportunities, career development and aligned incentives to retain talent, Sanborn says.
Additional Strategies for Risk Management
Another key risk abatement strategy is transaction structuring, relying on such mechanisms as earnouts and adjusted valuations, to help bridge valuation mismatches between buyers and sellers.
Earnouts and contingent payments link part of the purchase price to the acquired company’s future performance, mitigating upfront financial risk for the buyer. This can also involve lowering the valuation multiple to account for uncertainty.
“These mechanisms generally don’t acutely guard against one specific macro risk but more broadly on company performance,” Bugler says.
However, Taneja warns that such structures could make a buyer’s offer less competitive, especially in a bidding scenario with other interested parties. “Buyers should weigh the trade-offs carefully when structuring their offers,” he says.
Recognizing Risks as Manageable and Acceptable
Buyers and advisors must ultimately recognize that not all unpredictable risks can be fully mitigated.
The pandemic reminded everyone “how quickly a macro shock can affect the globe,” Bugler says. “It is valuable to think about what is really worrying you as an acquirer. If you are extremely nervous of any major economic or political shock, then trying to do an acquisition may not be the best strategy for you unless it is one that is diversifying away inherent risks. No matter how you structure a transaction, there are always risks.”
As an executive, advisor or other player in the staffing M&A landscape, assuming risks and staying prepared for any challenges will be key to your success.
“Ultimately, successful buyers are those who remain flexible and proactive in addressing both internal and external challenges,” Taneja concludes. “While unexpected hurdles are unavoidable, a clear strategy and a focus on long-term value creation can position companies to weather slowdowns and emerge stronger.”