What does this mean for 2024?

Although 2023 has seen a more subdued level of M&A activity, it's important to highlight that it was preceded by the post-pandemic boom of 2021 and 2022. We've also seen a notable trend of UK acquirers engaging in overseas bolt-ons, with the US emerging as a preferred destination.

In addition, the recruitment sector faces domestic uncertainties with an upcoming UK general election and the potential for a change in government. The Spring Budget announcements made on 6 March also introduce potential positive and negative implications going forward. Against this backdrop, the consistent threat of a recession in the UK further highlights the challenges and considerations for stakeholders in the recruitment M&A landscape.

Finally, the lingering question revolves around the sustainability of M&A trends in the sector that mirrored the patterns of pre-2020 in 2023, influenced by inflation, high interest rates, and political uncertainty. While it remains challenging to predict with certainty, several indicators suggest the trend of more M&A, as seen in Q4, will continue.

The persistent threat of inflation and high interest rates could continue to dampen the enthusiasm for large-scale deals, making stakeholders more cautious in their strategic moves. Additionally, the geopolitical landscape, marked by ongoing conflicts and tensions, may continue to influence investment decisions in the sector. As the industry grapples with these multifaceted challenges, the ability to adapt and navigate through the complexities will be crucial for businesses engaging in M&A activity in the recruitment sector as we progress into 2024.

Despite these challenges, we’re confident that staffing and recruitment companies will continue to play a crucial role in the UK economy.