The Canadian staffing industry represents around two million temporary workers or 13.6 per cent of the country’s workforce according to Statistics Canada. The staffing industry also accounts for $15 billion in revenue and is the most prominent in Ontario which creates 58.3 per cent of the revenue, followed by Alberta at 16.1 per cent and Quebec at 14.5 per cent.
Four subsidiaries from the global companies Adecco Group, Allegis Group, Randstad and ManpowerGroup are the largest industry entrants in Canadian staffing; however, the industry is fragmented, as these firms hold less than 10 per cent of the Canadian staffing market each. The remaining 60 to 70 per cent of the staffing market is divided among private enterprises, smaller subsidiaries from the US, global based firms and a few other publicly traded companies.
As many segments of the staffing industry are mature in nature and meaningful organic growth has proven challenging for mid-market firms. As a result, much of the growth in the industry especially for the mid-sized players has been driven by acquisitions. The top three firms in North America have closed 38 transactions over the past five years, which is roughly eight per cent of the total deal volume over that time frame.
M&A transactions involving staffing firms headquartered in North America have trended upward over the last three and half years.
Recently, buyers have been targeting staffing firms active in the healthcare, IT and engineering sectors or with a special niche or geographic coverage that would round out their business.
At Whitehorn, we have been active in the industry for many years. Most recently, we helped the shareholders of Calgary-based, RG Mallett Oilfield Enterprises with the sale of the business to Design Staffing Group, headquartered in Edmonton. See here for a review of this transaction.
If you are considering an acquisition or a sale of a business in the temporary employment, HR consulting or staffing sector, give Whitehorn a call and we can discuss your next steps.
(Sources: Statistics Canada, S&P CapitalIQ, company press releases and various news sources (e.g., Staffing Industry Analysts, American Staffing Association, Association of Canadian Search, Employment and Staffing Services, etc.)
