Human Capital Management
Q2 2025 Report
Q2 2025 HCM Summary & Outlook
M&A Trends & Outlook:
Despite persistent macroeconomic uncertainty, the HCM deal market has shown resilience While M&A activity declined 15% in Q2 2025 compared to the same period last year, activity has held steady with the prior two quarters.
Of the 96 transactions recorded in Q2, Staffing and Recruiting accounted for the majority with 57 deals, followed by Core HR with 19 Talent Management and Talent Acquisition remained subdued, with 13 and 7 transactions, respectively A clear shift toward fewer, larger-scale deals has emerged over recent quarters, as buyers focus on strategic fit, profitability, and recurring revenue models rather than expansion into newer, less mature companies.
VC Trends & Outlook:
Venture capital activity in Q2 2025 reflected diverging trends Deal volume contracted 38% yearover-year to 68 transactions, extending a multi-quarter slowdown In contrast, capital raised accelerated to over $1 5B for the period, underpinned by three $100M+ funding rounds, compared to six such mega-rounds in all of 2024. 2025 has also seen the creation of three new unicorns, as the IPO backlog in the HCM space continues to grow.
STAFFING + RECRUITING
Q2 2025 saw a notable uptick in Staffing and Recruiting M&A activity, driven by sustained demand in the IT and Healthcare sectors. The quarter featured several sizeable, high-impact transactions, reflecting buyer interest in scaled, strategicallyaligned platforms. Strategic acquirers utilized M&A to enter new geographies, deepen specializations, and expand customer bases, while Private Equity investors continue to target tech-enabled platforms with scalable business models.
Staffing:
• BGSF, a leading provider of professional workforce solutions, sold its professional staffing segment to INSPRY Solutions, a talent solutions and professional services firm
• Aya Healthcare, the largest US healthcare staffing provider, acquired Locum’s Nest, a UK-based healthcare workforce management platform Executive Search:
• AC Lion, a recruitment firm serving the digital and technology sectors, acquired Ampersand Talent Advisors, an executive search firm specializing in creative and AI talent
• Gallagher, a global insurance brokerage, sold off its Canadian executive search practice to Phelps, an executive search firm – this comes shortly after Gallagher divested its US executive search practice in Q1 2025
CORE HR
The Core HR sector delivered another solid quarter with 19 transactions. Workforce Management led activity with 8 acquisitions, while Payroll and Compensation & Benefits each recorded 4. Large strategics such as UKG continued consolidation efforts despite economic uncertainty.
Workforce Management
• UKG, an HR and workforce management provider, acquired Shiftboard, a frontline employee scheduling software for energy and manufacturing
• ELMO Group, an all-in-one HR solution provider, acquired Rotageek, an AIdriven workforce scheduling solution, to strengthen its UK presence.
Compensation & Benefits:
• Revelio Labs acquired Salary Board, a provider of real-time compensation data and labor market insights, to expand its compensation analytics capabilities
• Epassi Group, a provider of employee benefits technology, acquired Zest Technology, a benefits software platform, to expand its UK presence
Q2 2025 versus Q2 2024
96 M&A DEALS
$1.5B VC ACTIVITY
TALENT MANAGEMENT
The Talent Management sector had a slower than usual quarter with just 13 deals –likely a downstream effect of the broader market uncertainty. Notably, employee engagement and rewards & recognition platforms accounted for nearly half of all M&A activity. This reflects growing demand among enterprises to engage and retain top talent amidst rapid organizational change and a growing trend towards holistic employee benefits.
Employee Engagement:
• WorkStep, a holistic frontline employee engagement platform, announced its acquisition of WorkHound, a supply chain employee feedback platform
• TMA, a talent management and assessment company, acquired DecisionWise, an employee engagement and feedback solutions provider Talent Analytics:
• Polaris, a leading engagement technology company, acquired AwarditAB, a digital platform that enhances employee recognition and engagement
• Link and Motivation, a Japanese employee engagement and development firm, acquired Unipos, a peer-to-peer employee recognition platform
TALENT ACQUISITION
With just 7 deals in Q2 2025, the Talent Acquisition sector saw its lowest transaction count in two years given a cloudy hiring horizon. Hiring tools and onboarding solutions made up the majority of the deal activity for the sector.
Hiring Tools:
• Engagedly, a performance management and employee engagement platform, acquired HiringTool.co, a hiring, onboarding and talent development solution
• Ehave, a digital mental health company, acquired AIHeadHunter, a hiring tool that uses machine learning to improve recruitment efficiency
Onboarding:
• HR-ON, a talent acquisition software provider, acquired Introdus, an employee preboarding and onboarding solution to create a unified hiring platform
• Unseen Group, a talent solutions platform, acquired Meet & Engage, a candidate experience and onboarding platform for major UK employers
HCM Public Markets
Comparative Multiples
Revenue Multiples
EBITDA Multiples
Source: PitchBook, Data as of July 2025, Median Trading Multiples
Sub-Sector Ecosystem
Acquisition
One-Year Historical Index Performance
After a year and a half of S&P 500 dominance, the Core HR index surpassed the annual growth of the broader market index – growing by 28% over the past 12 months. The Talent Acquisition index also saw strong performance, growing 11% YoY. Staffing and Talent Management struggled since the new year, with each posting a 20% decline.
HCM Public Trading Statistics
CORE HR
Talent Management
Talent Acquisition
Staffing + Recruiting
Count by Sector
Count by Sub-Sector
Recent Notable Transactions
$425M MAY 2025
UNDISCLOSED JUN 2025
UNDISCLOSED APR 2025
UNDISCLOSED JUN 2025
UNDISCLOSED APR 2025
UNDISCLOSED MAY 2025
UNDISCLOSED MAY 2025
UNDISCLOSED JUN 2025
UNDISCLOSED JUN 2025
• Workplace Options is a global provider of employee wellbeing solutions, serving over 150 million people across 200+ countries and territories
• TELUS Health’s acquisition expands global reach, enhances AI-enabled wellbeing services, and creates new revenue opportunities in the employer health and wellbeing sector
• Zest is a UK-based SaaS platform founded in 2004, offering a highly configurable and intuitive solution that enables employers to manage, communicate, and expand their employee benefits offerings
• Epassi Group, a leading European provider of employee benefits technology, has acquired Zest to enhance its presence in the UK market and expand its product suite across Europe
• WorkHound is a real-time employee feedback platform for frontline industries like trucking and logistics, offering anonymous surveys, sentiment analysis, and retention insights
• The acquisition by WorkStep enhances its AI-powered engagement platform, adding deeper analytics, predictive insights, and expanded feedback capabilities to improve frontline worker retention
• Topia is a global workforce management platform specializing in immigration, talent mobility, and relocation solutions to help companies manage distributed and mobile workforces efficiently
• The strategic investment by Bow River aims to accelerate Topia's growth, enabling the company to enhance its product offerings and capitalize on a $10 billion addressable global mobility and remote workforce market
• Proman, the world’s 11th largest staffing provider, acquired Onestaff, a digital freelance marketplace
• This acquisition broadens Proman’s HR solutions portfolio while enabling OneStaff to accelerate its growth in France and enter the US market
• All Star Healthcare Solutions, a Knox Lane-backed provider of healthcare staffing services, acquired Integrity Locums, a locum tenens staffing firm
• This acquisition unites All Star, the 7th largest US locum tenens provider, with Integrity, the 18th largest, to strengthen market share amid the growing demand in the locum tenens staffing sector
• 20/20 Foresight Executive Talent Solutions, an executive search firm focused on real estate and financial services, acquired Winter Street Search, a retained search firm focused on the financial services industry
• This acquisition strengthens 20/20’s financial services practice by adding Winter Street’s asset and wealth management expertise along with its Managing Partners, Lisa DeConto and Scott Vierra
• Beeline, a leading vendor management system provider, acquired MBO Partners, a workforce management firm
• This acquisition enhances Beeline’s position as a leading VMS solution by adding MBO’s capabilities in both employer and agent-of-record services
• Newbury Partners, a leading technology consulting provider for the staffing industry, acquired Sixcel, a business intelligence and staffing-technology consultancy
• This acquisition enhances Newbury’s offerings to meet the rising demand for technology consulting within the staffing industry
HCM Active Buyer Summary
CORE HR
Apr
Apr
Apr
May
May
Jun
Jun
Jun
TALENT MANAGEMENT
Jun
Jun
Jun
HCM M&A Transactions
TALENT ACQUISITION
Deal Date Company Name
Apr 2025 ClearChecks General Atlantic
Apr 2025 Krita.ai Bahwan CyberTek
May 2025 Hiringtool.co
May 2025 Introdus
Jun 2025 AIHeadHunter Ehave (OTCMKTS: EHVVF)
Jun 2025 Meet and Engage Unseen
Jun 2025 Eploy The Access Group
STAFFING + RECRUITING
Apr 2025 FleetLogix Laz Parking
Apr 2025 Glide Personeel The Dutch Staffing Group
Apr 2025 Man to Man Holdings Nisso Corp
Apr 2025 Gallagher’s Canadian executive search practice Phelps
Apr
HCM M&A Transactions
STAFFING + RECRUITING
Jun
HCM Financing Activity
Q2 2025 Financing Activity by Sub-Sector
Deals Over $100M
HCM Financing Summary
Notable Financings
Workforce Management
$450M MAY 2025
RECEIVED INVESTMENT FROM
Rewards & Recognition
$165M MAY 2025
RECEIVED INVESTMENT FROM
Growing Average Deal Sizes
In a reversal of the trend from late 2021 to early 2024, average deal size is rising even as deal volume declines
RECEIVED INVESTMENT FROM Workforce Management
$100M JUN 2025
$40M APR 2025
RECEIVED INVESTMENT FROM Compensation & Benefits
Annual Financing Activity
HR Tech Unicorn Tracker
HCM Financing Summary
EARLY-STAGE VENTURE CAPITAL
Apr
HCM Financing Summary
LATER-STAGE VENTURE CAPITAL
Jun
PRIVATE EQUITY GROWTH / EXPANSION
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