What Is My Staffing Agency Worth?

The staffing and recruiting industry is massive — over $200 billion in the U.S. alone — and extremely fragmented. That fragmentation makes staffing agencies attractive acquisition targets for PE firms, larger staffing companies, and entrepreneurs looking to buy a cash-flowing business.

If you're thinking about selling your staffing agency, here's how to think about valuation.

Typical Valuation Ranges

Staffing agency valuations depend heavily on your model:

Temporary / Contract Staffing

• 0.3x to 0.6x revenue or 4x to 6x EBITDA
• Lower revenue multiples because margins are thin (typically 15-25% gross margin)
• EBITDA multiples are the better metric for temp staffing

Direct Hire / Permanent Placement

• 0.8x to 1.5x revenue or 3x to 5x SDE/EBITDA
• Higher revenue multiples because margins are much better (60-80%+)
• More volatile — revenue swings with hiring cycles

Hybrid Models

Most agencies do both temp and perm placement. Valuation reflects the mix — agencies with a higher share of contract/temp revenue get more credit for recurring cash flow.

Healthcare Staffing (Premium)

Healthcare staffing agencies often command 6x to 10x EBITDA due to strong demand, regulatory barriers, and the specialized nature of the workforce. Travel nursing agencies saw peak multiples during COVID but remain above historical averages.

IT/Technology Staffing

Tech staffing agencies with strong client relationships and in-demand skill verticals (cloud, cybersecurity, data/AI) trade at 5x to 8x EBITDA.

What Buyers Care About Most

Gross Margin Profile

Buyers scrutinize your gross margin by revenue type and by client. Temp staffing margins of 20-25%+ are healthy. Perm placement margins should be 50%+. Blended margins vary by mix.

Client Diversity

Like every service business, client concentration kills value. If your top client is 20%+ of revenue, expect a discount. Ideally, no client exceeds 10%.

Contract Quality

Are your clients on multi-year master service agreements (MSAs), or do they order on a job-by-job basis? Long-term MSAs with guaranteed volume or exclusivity are far more valuable.

Recruiter Retention

Your recruiters are your revenue engine. If your recruiting team turns over every 12-18 months, buyers see a fragile business. Strong recruiter tenure (3+ years) and a pipeline of developing talent signal stability.

Fill Rate and Time-to-Fill

Operational metrics matter. High fill rates (75%+) and fast time-to-fill demonstrate execution capability and strong candidate databases.

Technology and Systems

Modern ATS (Applicant Tracking System), CRM, and back-office systems reduce operational risk and make integration easier for buyers. If you're running on spreadsheets, that's a concern.

Who Buys Staffing Agencies?

PE-Backed Staffing Platforms

Private equity has been the most active buyer category in staffing for years. They build platforms through acquisition — buying a mid-size agency, then acquiring smaller agencies in the same vertical or geography. Platform deals pay 5-7x+ EBITDA; add-ons pay 3-5x.

Large Staffing Companies

Companies like Robert Half, Kelly Services, and Hays acquire smaller agencies to expand verticals, enter new markets, or acquire specialized capabilities. These strategic buyers can pay premium multiples for the right fit.

Individual Buyers

SBA-financed buyers and entrepreneurs target profitable agencies doing $500K-$3M in net revenue. They're looking for a business they can operate and grow.

How to Maximize Your Agency's Value

1. Grow Your Temp/Contract Mix

Contract staffing revenue is more predictable than perm placement. A higher temp mix reduces revenue volatility, which buyers reward with higher multiples.

2. Build Long-Term Client Relationships

Convert job-by-job clients to MSA relationships. Even if the MSA doesn't guarantee volume, the formal relationship signals commitment and reduces churn.

3. Invest in Your Recruiting Team

Pay competitively. Offer training and career development. Create a culture that retains talent. Your recruiters' relationships with candidates and clients are your core asset.

4. Diversify by Industry Vertical

If you only staff for one industry, you're exposed to that industry's cycles. Expanding into adjacent verticals reduces risk and increases your buyer pool.

5. Systemize Your Operations

Document your recruiting processes, onboarding workflows, and compliance procedures. Implement a modern ATS if you haven't already. Systemization = scalability = higher value.

6. Address Compliance Risks

Staffing agencies face significant regulatory exposure — worker classification, employment law, OSHA, workers' compensation. Ensure you're compliant and have documentation to prove it. Compliance issues discovered during due diligence can kill deals.

Ready to Explore a Sale?

If you've built a profitable staffing or recruiting agency and you're considering your options, I can provide a confidential valuation and walk you through what a sale process looks like. Book a call — no obligation, just honest guidance.