Selling a Human Resources Business

Most HR consulting firms are priced off the cash the business can produce for an owner, after you back out owner-only expenses and one-time expenses. Value usually moves with retainer margins, how concentrated revenue is in a few clients, how often the founder handles sensitive employee relations, and how clean your liability boundaries are in writing. Rejigg’s free valuation calculator gives a starting range, then you can tighten it with clean add-backs and a client-level margin view.

Recruiting businesses are usually valued on repeatable production, so buyers dig into fill rate, time-to-fill, replacement guarantees, and whether one recruiter’s relationships drive most placements. Fractional HR retainers get valued on scope control and relationship transfer, so buyers focus on what the retainer includes, how out-of-scope work gets billed, and who handles high-stakes employee relations issues. If you have both lines, buyers often value them separately because the risk and margins behave differently.

Often yes, if cash flow is stable, financials are clean, and the business can keep running when the owner steps back. For HR firms, lenders tend to look closely at client concentration, contract terms, and whether revenue depends on one rainmaker or one senior consultant who does all the escalations. Rejigg’s SBA loan calculator helps you model the payment and compare it to your normalized earnings.

No. Brokers usually charge 5–10% of the sale price for packaging, outreach, and process management that you can run yourself with the right system. Rejigg gives you pre-vetted buyers, digital NDAs, direct messaging, a secure data room, and offer tracking, so you can run a broker-free sale and stay in control. Start with the prep guide, then list once your materials are ready.

Many HR sellers delay sharing client names until the buyer is credible and under NDA, especially if the work includes investigations, terminations, accommodations, or executive complaints. Early in the process, it’s common to share anonymized client profiles, industries, and contract sizes, then disclose names during diligence. Rejigg supports staged disclosure with buyer vetting and digital NDAs so sensitive information does not get sprayed across random inquiries.

Most buyers want monthly profit and loss statements, a balance sheet, and backup for any add-backs you claim as owner-only or one-time expenses. HR firms also benefit from a revenue breakdown that separates retainers, projects, recruiting fees, and pass-through items like HR software, background checks, or job board spend. If you run QuickBooks, Rejigg’s QuickBooks integration can pull financials into a structured data room so diligence moves faster.

Add-backs are expenses on your books that a buyer should not expect to continue after they own the firm, like personal expenses, one-time legal costs, or an owner salary above market for the job performed. In HR services, add-backs get scrutinized because labor is the product. If you add back senior hours or senior pay, buyers will ask who covers escalations and whether service levels change.

Many HR services deals close in a few months, but timing depends on how prepared you are for HR-specific diligence. The common slowdowns are unclear retainer scope, inconsistent engagement letters, and fuzzy boundaries around investigations or termination support. A staged process with a secure data room keeps momentum because buyers can review documents without repeated requests. Rejigg keeps buyers, documents, and next steps in one place so you do not lose weeks to back-and-forth.

In most sales, the team keeps working, and clients still need support the next day, but changes often follow over time. Buyers may adjust comp plans, titles, and reporting lines once they see who does what work and where the bottlenecks are. HR teams are especially attuned to weak communication, so plan your internal message and be clear about what changes now versus later. Rejigg’s transitioning guide helps you map the first 90 days.

Sometimes. Earnouts are more common when revenue depends heavily on the founder’s relationships or when growth claims rely on a playbook that has not been proven across multiple sellers or consultants. Buyers use earnouts to protect against client churn during the handoff. If you want to push for more cash at close, show team-based account coverage, clear scope boundaries, and stable capacity. Rejigg’s negotiation guide covers how earnouts usually get structured.

A working capital adjustment is a closing true-up so the buyer receives the business with a normal level of short-term assets and bills to pay. In HR services, it often comes down to accrued payroll, contractor payables, prepaid software, and timing gaps between billing and collections. If your cash swings because of recruiting success fees or project timing, it’s worth defining “normal” early so you are not renegotiating in the final week.

Have a clean, factual summary ready: what happened, what the outcome was, and what you changed in your engagement boundaries or documentation afterward. Most buyers can live with a past incident if the story is clear and the controls improved. Keep supporting documents organized and limit access to the people who need to review them. Rejigg’s due diligence checklist helps you stage sensitive legal materials.

Buyers usually want client agreements and engagement letter templates, recruiting search agreements, and any partner referral or revenue-share agreements. In HR, they read scope language closely, especially who owns employment decisions, how confidentiality is handled, and what happens when the work expands beyond the retainer. For recruiting, replacement guarantees and refund terms matter because they create real future obligations. A clean contract set in a secure data room speeds diligence and reduces late surprises.

Expect the buyer to ask for reasonable restrictions so you don’t immediately take clients or recruit your team after closing. What is enforceable varies a lot by state, and HR firms are often surprised by how narrow non-solicits can be in practice. The practical goal is clarity on who owns client relationships and how employees are protected from poaching. Rejigg’s negotiation guide covers common structures to discuss early.

Many HR services deals are asset sales because they let the buyer take the operation without assuming every historical obligation. Stock sales can be simpler for assignments and continuity in some cases, but buyers often ask for deeper legal diligence because HR work can show up in disputes long after the work was done. The best structure depends on contracts, taxes, and risk tolerance, so involve a qualified attorney and tax advisor. Keep your records organized so both options stay possible.

Run a staged process and control who knows internally. Share a tight overview first, then disclose sensitive items like client names, investigation-related processes, or employee data only after a buyer is vetted and under NDA. Decide early which leaders need to know to keep delivery steady, and avoid a rumor vacuum that makes people assume the worst. Rejigg supports confidentiality with pre-vetted buyers, digital NDAs, and staged data room access.

Compare offers by what you actually get and what you still have to earn. Look at cash at close versus earnout, how long the buyer expects you to stay involved in client transitions, and whether the buyer plans to change pricing or scope in ways that could trigger churn. Also check whether the deal depends on seller financing and what happens if performance dips. Rejigg’s offer comparison and deal tracking puts terms side-by-side so you can make a clean call.

A solid HR firm data room includes financial statements, client agreement templates, a client revenue summary that shows concentration, an org chart, role descriptions, comp plan summaries, insurance certificates, and your confidentiality and escalation practices. If you do recruiting, add placement metrics and guarantee terms. If you do investigations, share redacted process outlines rather than case files. Rejigg provides a built-in secure data room so you control who sees what and when.