The global labor market is in a period of transformation. Rapidly evolving AI technology is changing the nature of work across major industries. Elderly populations are exiting the workforce and creating gaps in many higher-income economies, while young workers are entering the labor market in droves in lower-income economies. Meanwhile, rising costs of living and slow growth are severely limiting job creation and wages.
Companies are increasingly tapping into internal resources — human resources, that is — to drive efficiency and resilience. In today’s uncertain market, HR services are more important than ever for keeping costs low, retaining top talent, and upskilling employees.
Emerging solutions across sectors like staffing, safety & compliance, training & career development, and payroll & benefits are good for employees — and for private market dealmakers.
In this PE Playbook, the Grata team has put together the need-to-know trends for investors considering making moves in the HR services market, including:
- High-growth sectors
- Geographical pockets of opportunity
- Recent acquisitions in the space
The market map above is not intended to be an exhaustive representation of companies in the space.
Companies that provide services that fall into multiple segments are categorized in this report by their primary offering.
Key Insights into the HR Services Industry
- M&A transactions have seen some fluctuation, but generally trended up in the last 10 years.
- There are currently over 444,000 privately owned HR services companies that are ripe for acquisition.
- Business is booming for private staffing companies. The sector is far and away the leader in terms of average revenue and growth.
- Private market dealmakers could find more opportunities to establish themselves as leaders in training & career development, a high-growth sector that has raised relatively little capital.
M&A Trends in the HR Services Industry
Transactions
Source: Grata
HR services transactions from financial sponsors and strategic acquirers have generally trended up over the last 10 years as the space has become more technologically integrated.
Most Active Financial Sponsors
Source: Grata
HgCapital tops the list of most active financial sponsors in the HR services industry. Its relevant transactions cover a wide range of HR services solutions, including payroll, workforce management, and organizational development.
Most Active Strategic Acquirers
Source: Grata
Constellation Software is the most active strategic acquirer in the space with 197 relevant transactions. Its HR services acquisitions primarily focus on solutions that make HR departments operate more efficiently.
HR Services Industry Overview
Market Distribution
Geography
Source: Grata
The US, the UK, and Germany lead the global HR services industry by number of companies. France and Canada round out the top five countries for the industry. Australia, India, and Brazil are also notable hot spots for HR services companies.
Source: Grata
Unsurprisingly, some of the densest pockets of opportunity in the US can be found in states with the highest rates of job growth: California, Texas, and Florida.
Private market dealmakers interested in the HR services industry should also look to the Southeast, which is the fastest-growing region of the country. North Carolina, for example, is home to two of the top 10 best US cities for job opportunities: Raleigh and Charlotte. Nashville, TN and Charleston, SC also make the list.
However, dealmakers shouldn’t limit themselves; with the rise of remote work and tech solutions for HR services, geographical boundaries tend to be less important.
Ownership
Source: Grata
Privately owned companies account for 54% of the HR services industry. Currently, there are over 444,000 private companies in the space that are ripe for acquisition.
Segment Distribution
Source: Grata
This report focuses on the following segments of the HR services industry. Grata users can see curated lists of some of the companies used to create each segment by clicking the links below.
HR Services Industry Public Comparables
Source: Grata
Private market dealmakers have no shortage of opportunities in the HR services industry. Companies in the space are generally strong performers across the board. There are, however, a couple of standouts even among this impressive pack.
The performance management sector leads in terms of average revenue growth. This can largely be attributed to the confluence of two major factors: the rise of HR tech and a tight job market stemming from economic uncertainty. As overall hiring demand has slowed significantly in 2025, employers are leaning more heavily on their current employees. (Note the 4.5% decline in average revenue for the public staffing sector.) That’s shifting the focus from training new talent to keeping current staff engaged and helping them continue to develop. At the same time, more and more tech solutions are emerging to enable real-time feedback and data-driven insights. AI and analytics tools can provide more granular, objective views into employee performance and help offer more personalized support.
Meanwhile, the safety & compliance sector sees the most average revenue of the markets analyzed in this report. With the rise of remote and hybrid work, safety management and compliance now extend beyond the physical office. New, tech-powered solutions are emerging all the time to meet the needs of the modern workplace and make compliance more proactive.
HR Services Industry Private Comparables
Source: Grata
Interestingly, private staffing companies see far more revenue on average than other HR services businesses. In today’s challenging economic climate, more employers are likely turning to smaller boutique staffing companies rather than the big-name national agencies. Boutique firms offer a number of benefits, including:
- Narrower industry focus. Rather than being jacks of all trades, smaller staffing agencies focus on expertise in a specific set of industries. They use this deep knowledge to make more accurate placements.
- Greater adaptability to market fluctuations. Private staffing agencies tend to operate with smaller teams, which means they tend to be more nimble in uncertain or changing environments.
- Access to local talent pools. Boutiques are typically headquartered in the communities that they serve. That often means faster placements and longer retention.
- More personalized support. When working with a private staffing agency, businesses typically work with the same account manager or recruiter until an employee is placed. That leads to better communication and more efficient processes overall.
Meanwhile, private performance management and workforce management solutions are constricting. The sectors have seen significant consolidation in the last few years.
Private market dealmakers interested in the HR services space could find more opportunities to establish themselves as leaders in the training & career development sector. The market has raised comparatively little capital, but it boasts the second-highest growth rate of the markets analyzed in this report.
Notable Acquisitions in the HR Services Industry
Source: Grata
Dataminr Acquires ThreatConnect
Last month, New York-based risk detection platform Dataminr acquired ThreatConnect. The company is headquartered in Romania. It provides cyber threat intelligence and cyber risk quantification solutions. ThreatConnect positions itself as a unified source of relevant threat intel that can enhance proactive threat detection and blocking, minimize false positives, and enable organizations to focus on what matters.
If you’re an investor interested in companies similar to ThreatConnect, try these:
Learn more about this acquisition — or any of the others listed below — anytime, anywhere using the latest version of the Grata Go mobile app. Get all of the ownership and investment data you need right in the palm of your hand.
Sidetrade SA Purchases ezyCollect
Later in October, France-based B2B software company Sidetrade SA purchased ezyCollect, a provider of accounts receivable automation software. EzyCollect services businesses of various sizes that need help automating their AR, managing credit risk, and improving cash flow.
If you’re an investor interested in companies similar to ezyCollect, try these:
Vista Equity Partners Management Buys Nexthink SA
Vista Equity Partners Management bought Nexthink SA, a digital employee experience platform, in October. The Switzerland-based company was valued at $3B at the time of the deal. Nexthink combines real-time analytics, automation, and employee sentiment data to enhance productivity and reduce downtime.
If you’re an investor interested in companies similar to Nexthink SA, try these:
Gallagher Acquires Tompkins Insurance Agencies
Earlier this month, global insurance brokerage, risk management, and consulting firm Gallagher acquired Tompkins Insurance Agencies for $223M. One of Tompkins’ key offerings is employee benefits insurance. The company is based in New York.
If you’re an investor interested in companies similar to Tompkins Insurance Agencies, try these:
Ambac Financial Group Purchases ArmadaCare
Ambac Financial Group acquired ArmadaCare in early November. ArmadaCare specializes in employee benefits solutions, such as executive medical reimbursement plans, supplemental health insurance, and mental health coverage. The company was valued at $250M at the time of the deal.
If you’re an investor interested in companies similar to ArmadaCare, try these:
Workday Buys Sana Labs AB
Human capital management giant Workday purchased Sana Labs AB in November. Sana Labs is a Sweden-based companies that offers AI-powered knowledge and learning tools for enterprises. The company was valued at $1.1B at the time.
If you’re an investor interested in companies similar to Sana Labs AB, try these:
Atlassian Acquires DX
Also in November, Atlassian acquired developer experience insights platform DX. The Utah-based company captures qualitative insights from across the developer experience and provides a comprehensive view of productivity. It also offers research-based diagnostic and survey platforms to improve the internal developer experience. DX was valued at $1B at the time of the deal.
If you’re an investor interested in companies similar to DX, try these:
Live HR Services Deals
Hundreds of live deals and active mandates are being showcased on the Grata Deal Network. Here are some examples of mandates related to the HR services industry:
- A scalable SaaS HR and wellness platform with $4M in revenue and a $2.9M EBITDA
- A nationwide healthcare staffing agency with $22M in revenue and a 24% EBITDA margin
- A staffing and recruiting firm based in the southern US with a $1.6M EBITDA and a 17% margin
If you’re interested in these deals and you want to see more, register to learn more here.
Are you a sell-side advisor interested in generating inbound leads for your data center infrastructure deal? Get started here.
HR Services Conferences
Grata makes it easy for dealmakers to find conferences, events, and trade shows in their industries. See attendee lists so you can set up meetings beforehand and make the most of your travel time. Check out which companies attended past events to find more potential targets.
Here are a few of the events related to the HR services industry that dealmakers can find and track in Grata:
Get the Most Out of the Playbook
If you’re an investor interested in making moves in the HR services space, Grata can help you put the insights in this article into action.
From in-depth market research to sourcing to pipeline management and relationship nurturing, Grata’s end-to-end dealmaking platform streamlines your workflows so that you can close more deals.
Schedule a demo today to get started.
