Here's what tech investors don't want to admit: the best HR businesses aren't platforms. They're old-school staffing agencies.

While founders burn billions building recruiting software nobody uses, Kforce built a fortune doing something "outdated."

Buying staffing agencies. One at a time. For 60+ years.

And the business model? Companies need workers. You find them. You place them. You collect 25-35% margin on every hour worked. No AI. No platform. Just relationships, recruiting skills, and recurring revenue.

1962. Kforce (originally Romac) starts as a single IT staffing office in Tampa. One niche: placing programmers and IT professionals.

Most people would've stayed local. But they looked at the market and saw 10,000+ independent staffing agencies in America, all doing the same thing in different cities, with zero consolidation.

The economics of a single agency: bill the client $50/hour, pay the temp worker $35/hour, keep $15/hour gross (30%). After office and recruiter costs of $8/hour, EBITDA is $7/hour, roughly 14% of revenue.

But when you consolidate: one back office serves 20 offices, recruiters fill jobs across all locations, national clients sign one vendor for all cities, and one applicant tracking system serves everyone. EBITDA margin jumps from 14% to 35%. That's the consolidation arbitrage.

1985: Kforce buys a regional IT staffing firm in Atlanta.

Structure: $384,000 down (20%), $1,152,000 bank loan (60%), $384,000 seller financing (20% over 4 years). Total cash out of pocket: $384,000.

The integration: kept every recruiter (relationships are the business), migrated to the shared technology platform, connected Atlanta to national clients, and centralized payroll processing for temps.

Results after 12 months: revenue $5,200,000 (+30% from national clients), EBITDA $832,000 (+73%). At a 12x public-company multiple, that's $9,984,000 of value on a $1,920,000 purchase. $8,064,000 in equity created in 12 months.

Most people would've stopped at 5-10 acquisitions. Kforce asked: what if we bought 320?

Phase 1 (1962-1990): Built to 15 offices organically, bought 12 small IT staffing firms. $80M revenue, 18% EBITDA margin.

Phase 2 (1990-2000): Bought 85 regional agencies, went public in 1995, expanded to finance and healthcare staffing. $520M revenue, 22% margin.

Phase 3 (2000-2015): Bought 145 agencies filling geographic gaps, added executive search and direct hire. $1.2B revenue, 28% margin.

Phase 4 (2015-2026): Bought 78 more agencies, focused on high-margin niches in tech and healthcare, optimized the portfolio. $1.6B revenue, 35% margin.

Today: 320+ locations, 1,800+ recruiters, 85,000+ temp workers placed annually, $4.8B market cap at roughly 8.6x EBITDA.

Agency profile: IT, healthcare, finance, or executive search specialization. Revenue $2M-$50M. Metro markets of 500K+ population. No single client over 20% of revenue.

Financials: 25%+ gross margin on temp markup, 10%+ EBITDA (improvable to 20%+), flat or positive revenue, 75%+ client retention.

Team: recruiter tenure averaging 3+ years, hands-on owner who knows the clients, willing to stay 2-3 years post-close.

Price: standard agencies 3-5x EBITDA, specialized tech/healthcare 5-7x, executive search 6-8x, always with earnouts tied to revenue retention. Kforce evaluates 150+ agencies annually and buys 5-8. That's a 4-5% acceptance rate.

Weeks 1-4: meet every major client personally, lock in 3-year contracts where possible, retain 100% of the recruiting team.

Months 1-3: migrate to the shared applicant tracking system, connect recruiters to the national candidate database, digitize processes to cut admin time 40%.

Months 3-6: cross-sell services to existing clients, introduce national clients to the local team, launch a direct hire division for higher margins.

Months 6-12: centralize payroll processing (25% cost reduction), share back-office functions, align recruiter compensation with performance.

Average improvement in 24 months: revenue +30-40%, gross margin +4-6 points, EBITDA margin +12-18 points, recruiter productivity +35%.

Before: a $5M revenue independent agency at 28% gross margin produces $350,000 EBITDA (7% of revenue) and is worth about $1.4M at 4x.

After integration: $6.75M revenue (+35% from national accounts), 32% gross margin, $1,012,500 EBITDA (15% of revenue, +189%).

The arbitrage: buy at 3-5x EBITDA, nearly triple the EBITDA, and hold inside a public platform trading at 8.6x. That's 2-3x multiple expansion plus 189% EBITDA growth, or 5-7x total value creation per acquisition.

There are 25,000+ staffing agencies in the US. Public companies own just 8%. 92% remain independent, 23,000 agencies, with an average owner age of 59 and 7,000+ actively seeking buyers.

Why now: 10 million open jobs, temp and contract work up 42% since 2020, remote work removing geographic barriers, independents unable to afford modern ATS technology, and 65% of owners with no exit plan.

Specializations ripe for consolidation: healthcare staffing (35-45% gross margins, 5-7x EBITDA asking), IT staffing (30-35% margins, 4-6x), finance and accounting (28-32%, 4-6x), executive search (40-50% retainer margins, 6-10x), and industrial staffing (18-25% volume margins, 2-4x).

Most people this week are building HR tech platforms that burn cash. Winners are contacting staffing agency owners about acquisition, mapping specialized agencies in their market, and identifying owners age 55+ with no succession plan.

One group chases automation. The other owns relationships.

Kforce didn't become worth $4.8 billion by building recruiting software. They did it by buying staffing agencies with real client relationships. 320 acquisitions. 60+ years. $4.8 billion created.

Path 1: Build an HR tech platform. Burn $5M-$20M. Fight LinkedIn and Indeed. Hope for traction (95% fail).

Path 2: Get direct access to staffing agencies for sale. Buy recurring revenue. Consolidate for margin expansion. Exit at 10-15x EBITDA.

Our average buyer closes their first acquisition in 6-9 months. If you're serious about acquiring a staffing agency in 2026, we should talk.

On this call, we'll identify staffing specializations with strong demand, show you agencies with owners ready to exit, and map out your path to building a platform worth 10-15x EBITDA.

This isn't for browsers. This is for buyers. If you're ready to own recurring B2B revenue, book the call. This week.

Stop building platforms. Start buying agencies.

Thursday, July 30, 2026

Kforce's average acquisition closing time: 60-90 days. They've done 320 deals over 60+ years. Our buyers are following similar timelines on staffing agency acquisitions. The agencies are there. The owners are exhausted. The workers need placing. The question is whether you'll take action this week.