Low unemployment rates could dampen Main Street mergers and acquisitions, as high net-worth individuals find opportunity elsewhere and buyers hesitate to acquire understaffed businesses.

In the Main Street market, 28 percent of business brokers believe talent shortages are hurting the ability to close deals while 16 percent say its helping, according to the Q2 2018 Market Pulse Report published by the International Business Brokers Association, M&A Source and the Pepperdine Private Capital Market Project.

Here’s what could be going on behind those numbers:

For businesses valued at $2 million or less, the largest buyer group is individuals, primarily first-time buyers (about half) and serial entrepreneurs (about a third).

These buyers are often high net-worth individuals, such as corporate executives, who are looking to buy themselves some control and autonomy. Essentially, they’re looking to buy a job.

But in a tight labor market, these are the same in-demand individuals targeted by headhunters. With ample career options and leverage with their current employers, these wouldbe buyers may have less incentive to get into the M&A market.

Low unemployment can make certain businesses less attractive, too, especially in high turnover industries such as restaurants, retail, and personal services.

Buyers may be resistant to take on an understaffed business or one that comes with a lot of hiring challenges, particularly in a tight labor market.

In the lower middle market, however, advisers are more ambivalent, with 18 percent saying low unemployment hurts deal-making and 19 percent saying it helps. As for me, I’d say that talent shortages are definitely bringing buyers to the table.

In this sector, we see a lot of strategic buyers looking to grow through acquisition. Low unemployment rates can drive strategic buyers to the market because organic growth is more difficult when talent is expensive and hard to find.

We saw this happen last year when a seller was looking to divest a top-performing division. After a sale, he was planning to keep his core team and focus on growing the remainder of the business, but the winning buyer put together a compelling offer for the entire company.

They knew they wanted the seller and his talent, and so they jumped higher to get it.

The labor market is near full employment with the jobless rate at 4.0 percent in June. That’s an increase over 3.8 percent in May, but experts attribute the uptick to an additional 600,000 job seekers who entered the market after having previously given up on finding work.

The good news is that people are being pulled off the sidelines and back into the workforce, but business owners in many industries will still have to fight for that talent.

For a couple of years now, business owners have had concerns about potential threats to their business.

They often express concern about a looming talent shortage. A select few are getting proactive by going after job-education partnerships with local schools or offering to pay for tech-school training.

In the near future, pipeline programs like that may prove highly attractive to buyers. Businesses who prove they have the ability to develop new talent, as well as keep their valued employees, will reduce perceived risk in a buyer’s eyes, and less risk equals more value at the closing table.