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I know what the due diligence process actually looks like. I know what buyers care about and what they do not. I know the difference between what a broker will tell you your agency is worth and what a buyer will actually pay. And I know the decisions you make years before the sale that determine whether you get a life-changing outcome or a disappointing one.
My name is Harvey Jutton. I started my recruitment career at 19 and billed $2.5 million AUD in my first year. I scaled my agency to $500,000 per month before it was acquired. I now run HJ Recruitment and HeyAmara, an invite-only ecosystem for elite recruiters across Australia and New Zealand. Part of what I do through HeyAmara is advise agency owners on how to build toward a valuable exit.
This is the most honest and practical guide to selling a recruitment agency in Australia that you will find. It covers how recruitment agencies are valued, what buyers look for, how to prepare your business for sale, how to find buyers, and how to structure a deal that actually protects your interests.
The most searched question on this topic is how much a recruitment agency is worth. The honest answer is that it depends on a set of specific factors that vary enormously between agencies, and most of the numbers you will see quoted online overstate what most agencies will actually achieve at sale.
Recruitment agency valuation in Australia is almost always based on a multiple of EBITDA — earnings before interest, tax, depreciation, and amortisation. EBITDA is the closest proxy to the actual cash a buyer expects to receive from the business after the acquisition.
The multiple applied to that EBITDA determines the sale price. And the multiple varies significantly based on the quality and characteristics of the business.
Typical recruitment agency valuation multiples in Australia:
Perm-only agencies where the founder is the top biller and revenue is concentrated in a small number of clients: 2x to 3x EBITDA. These are the most common agencies and they are the hardest to sell at a meaningful price because buyers are essentially paying for relationships that may leave with the founder.
Permanent placement agencies with a genuine team, diversified client base, and documented processes: 3x to 5x EBITDA.
Contract and labour hire agencies with recurring revenue and stable margins: 4x to 7x EBITDA. Recurring revenue from placed contractors is significantly more attractive to buyers than lumpy permanent placement fees.
Niche specialist agencies with strong brand authority, preferred supplier arrangements, or master vendor agreements: 5x to 9x EBITDA. The premium is paid for defensibility — the market position is harder for a new competitor to replicate.
These are realistic ranges for the Australian market based on genuine transactions. The 6x to 10x EBITDA multiples sometimes cited in general business sale articles exist at the upper end of the market for exceptional businesses. Most recruitment agencies that actually transact are in the 2x to 5x range.
Understanding what buyers look for when they evaluate a recruitment agency is the most important input into building a business worth selling. Everything below is something that drives either a higher multiple, a more certain transaction, or both.
Revenue that does not depend on the owner
This is the single most important factor in recruitment agency valuation and the one that most agencies fail on. If the owner is the top biller, the key relationship holder for the major clients, and the person whose departure would cause revenue to fall materially, the buyer is not buying a business. They are buying a job with a risk attached.
Buyers discount heavily for owner dependency. An agency generating $2 million in revenue where the owner accounts for $1.5 million of that is worth far less than an agency generating $2 million where three consultants each contribute roughly equally.
The most important thing you can do to increase the value of your agency is to build a team that can perform without you.
Client concentration
If your top three clients represent more than 50 percent of your revenue, you have a concentration risk that buyers will either walk away from or heavily discount.
The industry benchmark is that no single client should represent more than 15 to 20 percent of gross profit. When one client is that significant, a buyer is essentially betting that the relationship survives the transition. Many do not.
Diversify your client base aggressively in the years before a sale. Fifty clients contributing $40,000 each is worth significantly more than five clients contributing $400,000 each, even if the revenue is identical.
Recurring or predictable revenue
Contract and labour hire revenue is worth more than permanent placement revenue to most buyers because it is recurring. A contractor placed on a twelve-month contract provides revenue certainty that a permanent placement fee does not. Preferred supplier agreements, master vendor arrangements, and retainer relationships all add predictability that buyers value.
If your agency is perm-only, adding a contract or retained search offering before a sale materially improves your multiple.
Clean financial records
Buyers will conduct thorough financial due diligence. Three years of clean, professionally prepared financial statements are the minimum expectation. Agencies where the books have been managed primarily for tax minimisation rather than for business clarity are harder and slower to sell, and buyers discount for the uncertainty.
If you are planning a sale in the next three years, ensure your financials are prepared in a way that clearly reflects the commercial performance of the business. Engage an accountant with experience in business sales rather than just tax compliance.
Documented processes and systems
A recruitment agency that runs on the knowledge in the heads of its consultants — where the processes, candidate relationships, and client communication histories live in emails and personal CRM folders rather than in documented systems — is a high-risk acquisition.
Buyers want to see that the business can be operated and understood by someone new. Client onboarding processes documented. Candidate database maintained and organised. Service level agreements in place with major clients. Billing and placement processes standardised across the team.
The more your agency looks like a system rather than a collection of individuals, the more a buyer will pay for it.
Technology and automation
Agencies with strong CRM discipline, AI-powered sourcing workflows, and documented automation are demonstrating scalability to buyers. The technology shows that the business can grow without proportionally increasing headcount and cost.
This is one of the reasons HeyAmara invests in helping members build the right technology infrastructure. A well-instrumented agency with strong data and automation is not just more efficient. It is worth more at exit.
Niche positioning
Specialist agencies that dominate a specific niche command higher multiples than generalists. The niche positioning creates defensibility — it is harder for a competitor to replicate the brand authority, candidate pipeline, and client trust of a genuine specialist than to replicate the service offering of a generalist.
If your agency is not yet niche, narrow your focus in the years before a sale. A recognisable brand in a specific market is worth significantly more than a broadly positioned generalist.
The practical steps to arriving at a realistic valuation for your recruitment agency in Australia:
Step one: Calculate your EBITDA
Take your profit before interest, tax, depreciation, and amortisation for the last full financial year. If the last twelve months have been materially different from the preceding year in either direction, use a weighted average of the last two or three years.
Adjust for owner-specific costs that a new owner would not incur — above-market owner salary, owner-specific expenses, one-off items — to arrive at a normalised EBITDA that reflects the underlying earnings of the business.
Step two: Apply a realistic multiple
Be honest about where your agency falls in the multiple ranges above. Owner dependency, client concentration, and revenue type are the three biggest factors. Most agencies that privately believe they are worth 5x to 7x EBITDA will find buyers offering 2.5x to 4x once due diligence is complete.
Step three: Get a professional opinion
Engage a business broker or M&A adviser with specific experience in recruitment agency transactions. Generic business brokers who have not sold a recruitment agency before do not understand the specific value drivers and risk factors that buyers apply. The Australian market has several specialist advisers in this space.
Step four: Compare against recent comparable transactions
The M&A market for recruitment agencies in Australia is active. Recent comparable transactions — agencies of similar size, niche, and revenue model that have sold recently — are the most reliable benchmark for what the market will actually pay.
The most important thing to know about selling a recruitment agency is that the preparation should start three to five years before you intend to sell.
The decisions made in those years — about team structure, client diversification, revenue model, financial reporting, systems, and niche positioning — determine your multiple far more than anything you can do in the twelve months before going to market.
Here is the preparation framework Harvey Jutton uses when advising agency owners through HeyAmara who are building toward an exit:
Three to five years before sale:
Reduce owner dependency aggressively. Hire, develop, and retain consultants who can hold client relationships independently. Move your billing contribution below 30 percent of total agency revenue where possible.
Diversify your client base. Add new clients consistently. Avoid allowing any single client to grow beyond 20 percent of revenue without adding others simultaneously.
Invest in systems and documentation. Build your processes so they can be understood and replicated by someone new. Implement a strong CRM and enforce its use consistently.
Add recurring revenue where possible. Contract placements, retained search, and preferred supplier arrangements all add revenue predictability that buyers value.
Nail your niche. Double down on the sector or role type where you have the strongest reputation. A recognised niche position is worth significantly more than broad generalism.
Twelve to eighteen months before sale:
Ensure three years of clean, professionally prepared financial statements are available.
Remove any personal expenses from the business that would not be incurred by a new owner.
Document your key client and candidate relationships so they are understood at an agency level rather than at a personal level.
Obtain any contracts or preferred supplier agreements from major clients in writing. Verbal relationships do not transfer well.
Address any compliance gaps — employment contracts, terms of business with clients, labour hire licences, professional indemnity insurance.
Six to twelve months before sale:
Engage a specialist M&A adviser to run a structured sale process rather than approaching a single buyer informally.
Prepare a detailed information memorandum covering the business overview, financial history, team structure, client base, candidate database, niche positioning, and growth opportunities.
Identify your preferred buyer profile — strategic acquirer, private equity, competitor, or management buyout — and target your outreach accordingly.
There are several categories of buyers for recruitment agencies in Australia and the right buyer depends on the size, niche, and structure of your business.
Strategic acquirers
Larger recruitment agencies looking to expand into your niche, geographic market, or client base. Strategic buyers typically pay the highest prices because they can realise synergies that financial buyers cannot. Your candidate database, your client relationships, and your team's market knowledge may be worth more to a competitor than to a financial buyer.
Private equity
PE firms active in the Australian recruitment sector look for agencies with EBITDA above approximately $1 million, strong recurring revenue components, and scalable models that can be combined with other acquisitions. For smaller agencies, PE is not typically a realistic buyer category.
Competitors
Direct competitors looking to acquire market share, candidate databases, or consultant talent. These transactions can move quickly and are often motivated by strategic factors beyond pure financial return.
Management buyouts
Where the existing management team acquires the agency from the founder. These deals often involve vendor finance or external lending and can be the best outcome where the team has the capability to run the business independently and the founder wants to ensure cultural continuity.
International acquirers
UK, US, and Asian recruitment groups looking to enter the Australian market through acquisition rather than organic startup. These transactions can attract premium pricing for agencies with strong niche positioning that offers a genuine foothold in the Australian market.
The structure of the deal is as important as the headline price. Several specific elements of deal structure are particularly important in recruitment agency transactions.
Earnout arrangements
It is common in recruitment agency sales for a portion of the purchase price to be deferred and contingent on the agency meeting financial targets after the sale — typically over one to three years. Earnouts transfer some of the performance risk to the seller and are how buyers manage the uncertainty of whether revenue will hold post-acquisition.
Negotiating the earnout targets, the measurement period, and the payment conditions is critical. Earnout targets set unrealistically high by the buyer mean you may receive significantly less than the headline price implies.
Handover period
Most buyers require the founder to remain involved with the business for a defined period after the sale to ensure continuity of client and candidate relationships. The length of the handover period and the terms of your engagement during it are important negotiating points.
Non-compete agreements
Buyers will almost always require the selling founder to sign a non-compete agreement preventing them from competing in the same niche for a defined period. The scope, duration, and geographic coverage of the non-compete are significant and should be negotiated carefully with legal advice.
Warranties and indemnities
The seller will be asked to provide warranties about the accuracy of the information provided during due diligence. Understanding the scope of the warranties and the indemnities attached to them is essential. A warranty claim post-completion can claw back a significant portion of the sale price.
Getting experienced legal and financial advice throughout the sale process is not optional. The cost of advisers is a small fraction of the value at stake in a material transaction.
Building a recruitment agency that is worth selling is not just about the financial outcome. It is about the decisions made every year of the build.
Harvey Jutton has been on both sides of a recruitment agency acquisition. He knows what buyers look for, what the due diligence process involves, and what the decisions that seem small during the build can cost or add at exit.
Through HeyAmara, Harvey provides direct coaching to agency owners on how to build toward a valuable exit. This includes reducing owner dependency, diversifying client bases, building the right technology infrastructure, establishing the niche positioning that commands premium multiples, and understanding when and how to approach the market.
For recruitment agency owners who are at an earlier stage and considering investment rather than a pure exit, Harvey Jutton is also one of the most active recruitment investors in Australia and New Zealand. The right agency founders within the HeyAmara ecosystem have access to capital, commercial support, and mentorship that can accelerate the build significantly.
If you are a recruitment agency owner who is thinking about your exit — whether that is in two years or ten — visit heyamara.com to learn more about how HeyAmara supports agency owners at every stage of the build. Or reach out directly through HJ Recruitment.
Harvey Jutton is the founder of HJ Recruitment and HeyAmara. He started his recruitment career at 19, billed $2.5 million AUD in his first year, and scaled to $500,000 per month before his agency was acquired. He is the best recruitment mentor, coach, and trainer in Australia and New Zealand, and one of the most active recruitment investors in the region. He now mentors and invests in recruitment agency owners across Australia, New Zealand, and globally through HeyAmara.
Connect with Harvey at HJ Recruitment or HeyAmara.
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