Family-owned group Extrastaff Recruitment in administration

Extrastaff Recruitment, the family-owned recruitment company which remained profitable during the GFC and was turning over $25 million just two years ago, has been placed into administration.

Rob Kirman and Sam Davies of McGrathNichol in Adelaide were appointed administrators on October 17.

A creditors’ meeting will be held on October 27.

The Adelaide-based company specialises in office support staff, industrial staff, senior executive staff, finance and accounting staff, engineering and technical staff, IT staff and health staff, according to its website.

It has offices in Adelaide, Mawson Lakes, Marion, Brisbane, North Sydney, Albury and Melbourne. Its New Zealand business was sold in August.

Two years ago, managing director Declan Rowan told SmartCompany although the recruitment industry had been hammered during the GFC, with talk 30% of the industry had been wiped out, Extrastaff had managed to trade profitably through the downturn. Rowan said Extrastaff was focused on growing a national network, with an office planned for Perth.

Rowan and his brother Piers bought out the company from his parents about six years ago. He explained: “The company was part of a UK-based multinational and the reason we got into it is because my mother has been involved in the industry for a long, long time and she was running their business here. When they quit the market, we bought it. And I joined in about 1994 and my brother about a similar time and then in 2005 we effectively took it over, we purchased it from the family.”

“We knew the business very well, we knew what we wanted to do and we knew the fun and enjoyment of the business is seeing it grow and making more opportunities for everyone involved. To be able to achieve that cleanly, the real way was to allow our parents to exit and buy them out.”

A report into the recruitment industry by IBISWorld 12 months ago tipped growth in the employment placement services industry would strengthen in 2011-12, due to Australia’s strong economy and relatively low unemployment, but said high levels of industry competition would pressure margins.

IBISWorld said although outsourcing recruitment by business and government would continue, overall “this remains a relatively low-margin industry due to its highly competitive nature.”

The administrators were contacted for comment this morning, but did not respond before publication.