The UK recruitment market continues to attract the attention of both domestic and overseas investors, as overall deal volumes bounced back in 2024, according to accountancy and business advisory firm BDO.

Last year, a total of 104 deals were completed. This was up by 49% compared to the previous year. Overseas investment was also up, jumping 78% on 2023 figures from nine to 16 deals, with particular interest from the US. At the same time, transactions involving an overseas target rose and now make up 20% of total deal activity – up from 11% in 2023. This demonstrates a growing appetite from UK acquirers to invest in overseas recruitment businesses, enabling them to establish an overseas presence while gaining access to new markets.

The BDO Recruitment M&A Annual Report 2025 shows that the recruitment platform/software sector continues to be a strong performer, representing almost a quarter of total UK transactions (2024: 25 deals). There was also a stark increase in the number of Executive Search deals in 2024 across the UK and international markets, with 17 deals completing. This represents c.16% of all deal activity. Potential changes in CGT rates in the Autumn Statement also sparked an increase in deal activity, including a notable increase in MBOs which allow an exit route for shareholders whilst providing the opportunity for existing management to create significant future wealth.

The report also showed sustained activity in the recruitment M&A market from private equity, which accounted for more than a quarter (29%) of UK transactions in 2024. As a proportion of deals, this was marginally down on 2023 levels (34% although the number of deals rose to 30 from 24.

James Fieldhouse, M&A Partner at BDO LLP, said: “Despite economic challenges, we saw significant M&A activity in 2024 with deal volume growing by 49% compared to 2023.

“Unsurprisingly, deals in the recruitment platform/software space have continued to outpace other areas of the sector. The use of AI and other technologies is becoming increasingly the norm in the recruitment process, and we expect to see this trend continue to grow with both private equity and strategic trade players seeking high quality targets.”

There were a number of standout deals in 2024. In the larger mid-market, deal activity included Onex Corps’ investment in Morson Group and The Edwin Group’s investment from Quad Partners. Cross-border transactions included Aya Healthcare Inc’s acquisition of ID Medical Ltd and Korn Ferry’s (NYSE:KFY) acquisition of Trilogy Consultants International Limited. Elsewhere, other key deals included the Salt Recruitment Group’s trade acquisition of Zelo Digital, with Metric Search receiving significant investment from BGF.

Fieldhouse commented: “The recruitment industry has been particularly badly hit by the announcement of higher National Insurance costs and a much lower threshold on contributions with many companies choosing to freeze hiring. This coupled with wider global economic uncertainties, such as conflicts in the Middle East and Ukraine, alongside a new US presidency and the prospect of new trading arrangements to navigate, are having an adverse impact upon overall business confidence.

“However, looking ahead, we expect to see positive movements in the sector which builds on M&A activity we’ve seen during the last 12 months. The persistent low growth environment in the UK continues to provide a stimulus for agency directors to seek new opportunities, whether this be overseas as evident within the recent M&A activity, or identifying new sectors and/or markets to re-focus efforts.”

He continued: “Recruiters will need to be agile and work closely with their clients to deliver diverse solutions, leveraging an ever-increasing array of technology to support strategic decisions and push the sector forward.”

The BDO report highlighted that the UK recruitment market remains resilient, with revenues increasing from £21.9 billion in 2023 to £22.4 billion in the last 12 months. The overall recruitment market outlook also remains optimistic, with annual compound growth of 3.7% forecast over the next six years.