Valuing Healthcare Staffing Agencies in 2025: A Comprehensive Guide for Owners, Operators, Investors, and M&A Professionals

Will Hamilton
Mar 13
7 min read

The healthcare staffing industry connects medical facilities with skilled professionals to meet temporary and permanent staffing needs across a variety of roles. The sector includes traditional healthcare staffing services like travel nursing, per diem staffing, and locum tenens, but also includes a variety of firms focused on specialty staffing and outsourced niche services. The industry generally plays a critical role in addressing labor shortages, fluctuating patient demand, and regulatory compliance.

Whether you're preparing to sell a healthcare staffing agency, evaluating a partnership opportunity, or seeking to benchmark financial performance, this article explores the key valuation methodologies, drivers, and risk factors that determine the value of a healthcare staffing business.

I. Industry Context: Why Outsourced Staffing is in Demand in the Healthcare Industry

The healthcare staffing industry is attractive due to chronic labor shortages and aging populations. According to one source, the global healthcare staffing market was valued at $69.3 billion in 2024 and is expected to grow at a compound annual growth rate (CAGR) of 7.8% through 2034. Another source projects an 8.4% CAGR through 2029. However, the industry is notably subject to business cycles that mirror the labor market.

Key Growth Drivers

Key growth drivers for the industry include the following:

Aging Population and Chronic Disease Prevalence: The aging U.S. population continues to drive demand for healthcare services, particularly in geriatrics, oncology, and chronic disease management. This demographic shift increases the need for specialized staffing solutions to address complex care needs.
Healthcare Workforce Shortages: Persistent shortages of healthcare professionals, including nurses and specialists, are a major growth driver. For instance, the U.S. is projected to face a shortfall of over 4 million healthcare workers by 2026. Staffing agencies are critical in filling these gaps.
Technological Advancements: The adoption of artificial intelligence, data analytics, and digital platforms is transforming recruitment processes. These technologies streamline hiring, reduce costs, and enable faster matching of professionals to vacancies, which can both help and hurt staffing firms.
Flexible Work Models: Increasing demand for flexible work arrangements—such as gig roles, per diem shifts, and part-time contracts—has reshaped the industry. These models help attract talent while addressing fluctuating patient volumes, and can be difficult for healthcare providers to implement on their own.
Regulatory Changes: New regulations mandating nurse-to-patient ratios and staffing levels are driving demand for temporary staffing solutions to ensure compliance without long-term employment costs.
Rise of Home Healthcare and Telemedicine: Growth in home healthcare services and telemedicine has expanded the scope of healthcare staffing to include virtual roles like telehealth providers and medical coders. This trend reflects evolving patient care models and technological integration.

II. Top Reasons to Get a Valuation of Your Healthcare Staffing Agency

The following is a list of common reasons for commissioning a valuation analysis or appraisal of a healthcare staffing business:

1. Preparing for a Sale or Strategic Partnership

To establish a defensible asking price when marketing the business
To evaluate offers from private equity, strategic buyers, or joint venture partners
To understand how your company compares to market benchmarks

2. Internal Ownership Transition

For buy-in or buy-out of partners
To support fair and compliant equity allocation among owners
To plan for generational succession or family transfers

3. Estate & Tax Planning

For gift or estate tax reporting to the IRS (especially for closely held businesses)
To support asset protection strategies
To plan for long-term wealth transfer or charitable contributions

4. Litigation or Dispute Resolution

For divorce proceedings involving business asset division
In shareholder or partnership disputes
For economic damages assessments in legal proceedings

5. Business Planning & Strategic Growth

To establish a valuation baseline for performance benchmarking
To support capital raise, refinancing, or line-of-credit applications
To identify value drivers and areas for operational improvement

III. Valuation Approaches for Healthcare Staffing Agencies

Valuation professionals typically apply three core methodologies to estimate the value of a healthcare staffing agency:

Income Approach (Discounted Cash Flow or Capitalization of Earnings)

This approach values a business based on the present value of its expected future earnings or cash flows. It’s most appropriate when an agency has a stable operating history and predictable future performance.

Key assumptions include:

Normalized EBITDA or owner’s discretionary earnings
Growth rate assumptions (organic and acquisitive)
Risk-adjusted discount rate (typically 10–25% for staffing agencies)
Capital expenditure needs

Pros: Based on the business’ future earning power

Cons: Sensitive to forecasting errors and discount rate subjectivity

Market Approach (Comparable Transaction Method, e.g. Market Multiples)

This method uses observed EBITDA multiples or revenue multiples from recent M&A transactions or public companies in the healthcare staffing space. Typical multiples for small to medium -sized healthcare staffing agencies are within the range of 3x to 8x EBITDA.

This article includes more details and information about healthcare staffing valuation multiples.

Pros: Easy to benchmark; useful in active M&A environments

Cons: Requires access to quality private market data and careful adjustment for agency size, margin, geography, and a variety of other factors

Asset-Based Approach

Used only when the business is underperforming or being liquidated. The value is derived from the net assets (e.g., equipment, leasehold improvements) minus liabilities.

Pros: Useful in distressed scenarios

Cons: Intangible value of the agency can be difficult to quantify under this method

IV. Key Value Drivers in Healthcare Staffing Valuation

Several specific factors can materially influence a staffing agency's valuation multiple:

Earnings Quality

Buyers and valuation professionals place significant emphasis on normalized EBITDA and / or cash flow. Adjustments often include:

Owner compensation (if above/below market)
Non-recurring revenue or expenses
Related-party lease arrangements
Post-transaction adjustments
Out-of-period adjustments

Growth Potential

Discount rates and valuation multiples are a function of perceived risk and growth. Key considerations within the industry related to growth include the following:

Expanding Client Base Across Multiple Facility Types: Serving a wide range of healthcare providers—hospitals, outpatient clinics, long-term care facilities, and home health—reduces reliance on any single segment and opens diverse revenue channels.
Growing Demand Driven by Workforce Shortages: Persistent shortages of nurses, allied health professionals, and physicians—especially in rural and post-acute care settings—create long-term demand for flexible staffing solutions.
Technology-Enabled Talent Platform: Use of modern applicant tracking systems, credentialing tools, and automated scheduling increases fill rates, improves efficiency, and supports scalable growth.
Recurring Revenue from Long-Term Contracts and MSP Agreements: Preferred vendor agreements, managed service provider (MSP) roles, and exclusive contracts with large systems ensure predictable income and client stickiness.
Geographic and Service Line Expansion Potential The ability to enter new markets or add new staffing categories (e.g., travel nursing, locum tenens, behavioral health) signals strong growth runway and adaptability to evolving healthcare needs.

Risk Factors

Key considerations within the industry related to risk include the following:

Diversified Client Base and Long-Term Contracts: Serving a wide range of healthcare facilities (hospitals, clinics, LTCs) across multiple regions—especially under exclusive or long-term agreements—reduces revenue concentration and client turnover risk.
Reliable, Credentialed Talent Pool: Maintaining a large, pre-vetted database of qualified professionals (e.g., RNs, CNAs, allied health, locum tenens) ensures consistent fill rates and reduces the risk of staffing shortages or client dissatisfaction.
Strong Compliance and Credentialing Systems: Well-documented onboarding, licensure verification, and ongoing compliance monitoring (e.g., JCAHO standards) minimize legal, reputational, and regulatory risks.
Scalable Technology and Back-Office Infrastructure: Using robust software platforms for applicant tracking, scheduling, payroll, and timekeeping supports operational efficiency and reduces integration friction for buyers.
Experienced Management Team and Low Internal Turnover: A stable leadership team and low attrition among internal staff demonstrate organizational maturity and operational continuity, both of which are attractive to investors.

V. Current Market Trends in Healthcare Staffing M&A

Healthcare staffing M&A, perhaps more than any other healthcare niche, experienced a massive boom during the pandemic corresponding with staffing shortages across the industry and corresponding surges in rates and placements. Announced M&A volumes fell of a cliff (normalized?) in 2023, but are showing signs of a rebound. It's also important to note that the boom/bust primarily occurred in the traditional staffing and travel nursing segment, while the broader "specialty services" staffing category has remained relatively steady from an announced deal volume perspective.

Major acquirers in the specialty services staffing category include radiation physics provider Apex, vascular access and infusion nurse staffing provider Dynamic, and pediatric home therapy staffing provider InHome Therapy. The general staffing and travel nursing category has mostly been dominated by current / formerly publicly-traded firms Aya, AMN, and Cross Country, but there are several large sponsor-backed platforms as well.

Healthcare Staffing EBITDA Multiple Trends

Larger healthcare staffing platforms typically command higher EBITDA multiples than smaller agencies due to their scale, diversified revenue base, and reduced operational risk. These platforms benefit from centralized management, robust networks, and greater negotiating leverage with providers, all of which are factors that enhance profitability and stability. This combination of scalability, infrastructure, and lower risk profile makes larger platforms more attractive and valuable in the eyes of strategic and financial buyers.

According to our database, multiples for larger healthcare staffing platforms with EBITDA of over $5 million annually can range from 4x to 14x EBITDA due to a wide variety of factors.

Multiples for Small Healthcare Staffing Firms

Small, lower market healthcare staffing firms typically fetch much lower multiples, if they can even be sold, as heavy owner-operator involvement can be difficult to replicate by buyers. According to data from our active listings database, staffing firms with under $1 million EBITDA tend to be marketed in the 3x to 5x range, while firms with $1-10 million are marketed in the 5x to 7x range.

VI. Final Thoughts: Keys to Maximizing Value

If you're a healthcare staffing agency owner or executive planning to explore a sale or equity partnership, consider the following strategies to enhance your valuation:
- Build a Diversified and Recurring Client Base: Reduce client concentration by serving a broad mix of healthcare facilities (hospitals, long-term care, outpatient centers) across multiple regions, ideally under long-term contracts or preferred vendor agreements.
- Invest in Scalable Technology and Talent Platforms: Implement modern applicant tracking systems (ATS), credentialing tools, and scheduling software to streamline operations, improve fill rates, and support multi-state expansion.
- Maintain a Reliable, Credentialed Talent Pool: Develop a large, credentialed, and responsive network of healthcare professionals (including nurses, allied health, and locum tenens) to ensure rapid deployment and client satisfaction.
- Demonstrate Operational Efficiency and Compliance: Standardize onboarding, payroll, and compliance processes to improve margin, reduce liability, and appeal to buyers seeking low-risk, professionally managed platforms.
- Professionalize Financials: Buyers prefer accrual-based, GAAP-compliant statements.
About HealthFMV
HealthFMV specializes in appraising healthcare businesses and services arrangements, including healthcare staffing agencies.
- Business Valuation: We perform independent, third-party valuations of healthcare businesses to document regulatory, tax, and financial reporting compliance, resolve ownership disputes, and help ensure both parties to the transaction are comfortable with the financial terms.
- Transaction Advisory: We work with healthcare business owners, organization executives, providers, and their health lawyers to develop transaction structures and deal terms that further their business objectives while maintaining compliance with the complex healthcare regulatory environment.
- Services Arrangements: We prepare fair market value and commercial reasonableness opinions for a variety of healthcare services arrangements including management services, hospital-based specialty stipends, case rates and PC/TC splits, block leasing, and shared savings distributions, among others.
Contact Will Hamilton at whamilton@healthfmv.com with questions about our healthcare valuation services or to discuss your specific situation. Visit scoperesearch.co for more information about our healthcare M&A research services.