The licence decides how a staffing agency changes hands

A staffing agency in Canada typically sells for 3.0 to 5.0 times adjusted earnings, the professional services range. Temporary staff billed weekly to repeat clients lift it, and an agency built on permanent placement fees sits lower. The licence comes first: in Ontario and BC it stays with the company that holds it, so an asset buyer applies for its own.

The licence a buyer checks before the price

To sell a staffing agency in Canada, start with the licence, because a buyer will. In Ontario a temporary help agency has needed a licence of its own since July 1, 2024, and the province states that a licence applies only to the legal entity to which it was issued. Whether you sell the shares of that company or its assets therefore decides what happens to the licence on closing day. Firms that place permanent staff hold licences too, under rules that differ by province.

Agency licences in three provinces, side by side

The table covers what we confirmed on each government’s own pages in November 2026. For Quebec and the other provinces, ask the provincial labour ministry.

Ontario’s fee, term and security rules are on the ministry’s licensing page. A client that knowingly uses an unlicensed agency also breaks the act, so in an asset sale the buyer’s company needs its licence in hand before the first shift it supplies. In a share sale, ask the ministry what it wants to hear about the new owners. The choice between the two structures also changes your tax, compared in share sale or asset sale.

In British Columbia, section 12 of the Employment Standards Act requires a licence to operate an employment agency, defined as a person who, for a fee and for employers, recruits employees. Section 9 of the Employment Standards Regulation makes each licence valid for up to three years and forbids its transfer. An agency that supplies temporary staff it employs should confirm with the Employment Standards Branch which of its work the licence covers.

Alberta draws the line by employer of record. Service Alberta’s compliance standards say a temp agency that stays the employer of record for the people it places falls outside the licence for that work, and one that places someone permanently must hold it. The General Licensing and Security Regulation bars any sale or transfer of a licence, and a licence held by a partnership expires when its partners change. The province’s licence page asks a corporation to report new officers or directors in writing within 15 days.

Gross margin per hour, the figure behind the revenue

A temp agency’s revenue includes the wages it passes through to its workers, so two agencies with equal sales can keep different amounts of it. A buyer reads gross margin instead. That is the bill rate charged to the client less the pay rate and the employer costs on top of it, such as CPP and EI.

Take, as an illustration, a worker billed at $42 an hour whose wage and employer costs come to $33.60. The agency keeps $8.40 an hour, a gross margin of 20 percent. A buyer will ask for that figure by client for each of the last three years.

Permanent placement earns a one time fee when a candidate starts, and each fee has to be won again. Temporary staff on long assignments bill every week to clients who keep reordering, which a buyer counts as revenue that repeats. In Ontario an agency may generally charge a client for hiring one of its workers directly only during the six months from the worker’s first day with that client, so conversion fees belong on the permanent side of the books.

Margin also has a cash cost. An agency pays its workers every week or two and waits on its clients’ payment terms, so it funds a payroll float that grows with each placement. In a sale that float sits in the working capital target, and working capital in a business sale explains how the target is set.

Where a staffing agency lands between 3.0 and 5.0

Staffing sits in the Business & Professional Services row of our industry multiple table, at 3.0 to 5.0 times adjusted earnings, beside accounting firms and consulting practices. Adjusted earnings are the profit with the owner’s own pay and personal costs added back, the figure explained in SDE or EBITDA.

Our engine then moves that range for the size of the earnings and for four answers about the business. For an agency the split of temporary and permanent work carries the most weight, through the question of how much revenue repeats. Take, as an illustration, an agency with $800,000 of adjusted earnings and every other factor at its neutral setting.

Size moves the range as well. Earnings below $500,000 take 0.5 off, and earnings above $1 million add 0.3, the level most private equity buyers screen for. An agency whose branch managers run the desks while the owner is away earns up to 0.4 more.

Recruiters and clients who could leave together

In a staffing agency the client relationship often sits with one recruiter or account manager. A buyer will ask which clients each person handles, and what their contracts say about soliciting clients and candidates after they leave. Ontario bars non-competes for most employees, so the non-solicitation clause does the work there, and non-competes when selling a business sets out what holds up for staff and for you as the seller.

A master services agreement with a term and agreed markups gives a buyer revenue to count. A client who orders by email each week can move to another agency at short notice, and one client above 30 percent of revenue costs 0.35 in our engine, as customer concentration explains. A permanent search firm whose fees follow its senior recruiters has much in common with an accounting practice, where the price depends on who stays.

Where a few recruiters carry the client list, a buyer may pay part of the price as an earnout, due if revenue holds for a year or two after closing.

Workers’ compensation and the client’s share of unpaid wages

In Ontario the WSIB classifies a temporary employment agency in the rate classes of its clients, with a separate premium rate for each class it supplies, under policy 14-01-08 for decisions from January 1, 2025. A buyer will compare the classes on the account with the client list.

In an asset sale the WSIB may hold the purchaser liable for amounts the seller owes up to the date of sale, and a purchase certificate requested before that date protects the buyer for 30 days from issue. In a share sale the company keeps its account and the WSIB asks for the share purchase agreement. In British Columbia a WorkSafeBC clearance letter protects a buyer of assets from a lien for the seller’s unpaid premiums.

Ontario also makes a client liable for an agency’s unpaid wages, including overtime and public holiday pay, in proportion to the hours the worker spent with that client. That gives clients reason to check an agency’s payroll record, and a buyer will check it too.

Twelve months of groundwork for an agency sale

1. 01List each licence with the legal entity that holds it and its expiry date, and keep the letter of credit or bond on file beside it.
2. 02Report temporary and permanent revenue on separate lines each month, with gross margin by client.
3. 03Move regular clients onto written agreements with a term and agreed markups.
4. 04Check that each recruiter has signed a non-solicitation clause, and spread the largest clients across more than one person.
5. 05Bring the WSIB or WorkSafeBC account up to date, with each client’s work reported in its proper class.

Buyers range from competitors adding a region to individuals buying their first agency, and who buys Canadian businesses describes each group. To see where your agency sits in the 3.0 to 5.0 range today, the Quick AI valuation asks the repeat revenue question with three others and returns a range in a few minutes, before you give anyone your name.

The buyers, due diligence priorities and sector requirements are set out on InvestDeal’s professional services M&A advisory page.

Questions owners ask

What is a staffing agency worth in Canada?

Typically 3.0 to 5.0 times adjusted earnings, which is profit with the owner’s salary and personal costs added back. An agency with $800,000 of adjusted earnings would fall between about $2.4 million and $4.0 million, higher where most revenue is temporary staff billed to repeat clients and lower where it is mostly permanent placement fees.

Can a temporary help agency licence be transferred to a buyer in Ontario?

Ontario states that a licence applies only to the legal entity to which it was issued. In a share sale the company keeps its licence and its $25,000 security. In an asset sale the buyer’s company applies for its own licence with its own security, and may supply workers once the licence issues.

Do recruitment agencies need a licence in BC and Alberta?

In BC, an employment agency that charges employers a fee to recruit employees holds a licence from the Employment Standards Branch, valid up to three years and barred from transfer. In Alberta, an agency that places people permanently holds an employment agency business licence, and a temp agency that stays the employer of record falls outside it for that work.

Why do buyers look at gross margin in a staffing agency?

Revenue in a temp agency includes the wages passed through to workers. Gross margin, the bill rate less the pay rate and employer costs, shows what the agency keeps. A worker billed at $42 an hour who costs $33.60 leaves $8.40, a margin of 20 percent.