B2B, Industrial & Distribution · Buyer guide
Buying a Staffing & Recruiting business
Published · Reviewed by The Diligence Standard Team · Updated
Staffing revenue can grow quickly while margins compress or payroll funding needs increase. Client durability, spread and workers-comp exposure require detailed review.
How the business works
Client concentration, bill/pay spread, recruiter production, worker classification, payroll funding and workers compensation drive value.
Risks to test
- Large client concentration
- Spread compression
- Workers-comp claims
- Payroll funding/AR
- Worker classification
- Owner/recruiter relationship dependence
Evidence to request and reconcile
- Client-level revenue/gross profit
- Bill/pay rate detail
- AR aging
- Recruiter production
- Workers-comp loss runs
- Worker classification/payroll
Decision questions
- What gross profit comes from the top five clients?
- How much cash is needed to fund payroll before collection?
- What happens if the top recruiter leaves?
- Are worker classifications defensible?
- How has spread changed by client over time?