Reed (company)

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Reed
Reed Executive
Employment Agency
IndustryRecruitment
FoundedHounslow, United Kingdom 7 May 1960 (1960-05-07)[1]
FoundersSir Alec Reed
Headquarters
London
,
United Kingdom
Number of locations
350
Key people
James Reed, Chairman and CEO
ServicesEmployment agencies, recruitment, human resource consulting, outsourcing
OwnersPrivately owned

REED is an employment agency based in the United Kingdom.[2] The company was founded in 1960 by Sir Alec Reed CBE. Reed's son, James Reed is the current CEO and Chairman.[3] REED also offers training, outsourcing and HR consultancy services. The company's website, reed.co.uk, was established in 1995 and doubles as an employment website. In 2014 Alexa ranked reed.co.uk as the UK's largest employment agency website.

REED Group companies[edit]

REED Group claims 3000 employees across 350 business units and 116 locations worldwide, in 30 recruitment specialisms. The majority of its operations are in the UK but the firm also has offices in the Middle East, Asia and continental Europe[4][5]

The company has three main divisions:

  • Reed Specialist Recruitment provides recruitment services for permanent, contract, temporary and outsourced jobs, as well as IT and HR consultancy. Specialisms include accountancy, banking and finance, office support, education, health and care, HR, management procurement, science, technology, hospitality and leisure. It also offers learning and training services, including postgraduate study programmes, business training and personal development courses.
  • Reed Online Ltd is responsible for reed.co.uk. Jobs on reed.co.uk come from employers, recruitment agencies and Reed consultants. Established in 1995, Reed.co.uk was the UK's first online recruitment site. It reports receiving approximately 4 million job applications per month, with 14,000 registered recruiters; it also claims a database of 12 million jobseekers worldwide, gathered through online registrations and the Reed office network. The website reedglobal.com offers jobs across industry sectors around the world.[6] In 2018 the firm began a partnership with Google to integrate its vacancies into search results.[7]
  • Reed in Partnership offers programmes to help unemployed workers make the transition from welfare into work. It launched in 1998 as part of the Blair Government's New Deal Programme. Reed In Partnership claims to have helped 140,000 people into employment. Reed in Partnership also works with the Australian government. The UK coalition government elected in May 2010 cancelled some of Reed's previously held contracts while awarding new ones to the firm, such as for Alec Reed's home town of Hounslow. Reed in Partnership employed 450 staff as of 2014. It is a partner to the UK's National Citizen Service, a scheme open to 16- and 17-year-olds offering outward bound activities and help in creating community projects.

History[edit]

1960–1971[edit]

First branch of Reed Employment agency, 1960

The economic expansion and full employment of the 1950s led to a flourishing of employment agencies in the UK. While working as an accountant at Gillette, Alec Reed noticed that he was signing off on numerous payments to employment agencies, giving him the idea to start his own.

While still employed at Gillette, Reed worked a second job in an estate agency opposite Hounslow bus station. The estate agency's premises was split into two businesses, with one side selling property and the other side selling carpets.[8] Noticing that the carpet business was struggling, Reed approached the owner and offered to rent that portion of the premises for his fledgling employment agency.He funded the launch with £75 taken from his Gillette pension fund. The 26-year-old Reed opened the first branch of Reed Employment on 7 May 1960. Reed's former colleagues at Gillette provided him with his first few placements. The firm then expanded to a second branch in Feltham. Turnover grew rapidly but, as Reed later wrote in his autobiography:

"It was not until several years later that I realised that it was not my own genius that was the key to my instant success, but being near Heathrow Airport. It was expanding fast in the 1960s and had a voracious appetite for staff. Naively, I thought that was just normal, so it was quite a shock when I opened another half dozen offices and they all started to lose money. Within three years I had ten branches, but only two were profitable."

With the newer branches struggling, Reed sought the help of an advertising agency newly founded by Maurice and Charles Saatchi; Reed later claimed that their work had no perceptible impact on the business. Instead, Alec Reed began to publicise the company by experimenting with the location of Reed offices. In the early 1960s, most employment agencies were located in first or second floor offices. Copying the example of rival Alfred Marks, Reed began moving his offices to ground floor locations on main shopping streets, such as London's Oxford Street, so that they could be more easily seen by the public.

1971 flotation[edit]

The end of the 1960s saw a bull market in UK share prices, prompting stock market flotations by a number of rival employment agencies, including Brook Street Bureau and Alfred Marks.

By 1969 Reed Employment had opened 75 branches. Although profitable, financing the expansion caused cash flow difficulties. These were compounded when the firm's bank began to reduce its overdraft facility, which the firm had been using as working capital. Faced with a shortage of capital, Reed decided to float the business. Reed Employment floated on the London Stock Exchange on 13 January 1971, at an offer price of 12s 6d, a price/earnings ratio of 13.1 and a yield of 4.4%. Alec Reed retained a third of the company, having given a further third to his three children and floated the remaining third (1.3 million shares, for just over £10.97m in 2014 terms). At their 1980s peak, the shares increased to 150 times their offer value; they averaged 80 times offer value for most of the 1990s. The Reed Family retained effective control of the company post-flotation, through the combination of Alec Reed's shareholdings and that of his children. Alec Reed used part of his flotation windfall to found Reed Business School in 1972.

Alec Reed later described the flotation of Reed Employment as his greatest mistake in business, citing the administrative and financial burdens of running a public company: "Everything you may have heard about the city’s obsession with short-term performance is true...you become a metaphorical unpaid greyhound on a racetrack called the stock market." Reed has said that he started his Medicare retail pharmacy business partly to help maintain Reed Employment's stock price during slumps in the wider economy.[9] Medicare was founded in 1973 and sold to Dee Corporation in 1985 for £20 million; Reed used his £5m windfall from the sale to start the Reed Foundation, which owns 18% of the Group's shares.

1972–1983[edit]

Reed saw rapid expansion during this period, punctuated by two recessions. In 1972 turnover doubled to £10m, with profits just under £1m, helped by rising demand for temporary workers and by inflation.[10]

By 1975 profits had halved, partly due to the 1974 oil crisis. Reed expanded into new divisions and set up specialist recruitment firms, including what became to be known as Reed Health, Reed Finance and Reed Computing, among others. All were established under a holding company (Reed Executive), so that failure in one specialist division would not bring down other divisions. By 1979 the company had returned to profitability, achieving £3.1m on a turnover of £32m. During the 1970s and 1980s, Reed donated 1% of its pretax profits to the Charities Aid Foundation.

Reed also experimented with publishing during this time. Roundabout magazine was designed to be given away free to young women at Tube stations. Reed had already published an in-house magazine Reed Girl, but Roundabout was aimed at the public. It featured fashion, beauty and celebrity content, though its main purpose was to carry classified advertising for jobs available through Reed. Roundabout was launched October 1973, on the same day as three other similar magazines. Reed closed the publication in January 1974.

1983–1995[edit]

The recession of the early 1980s prompted Reed's first-ever loss (£1.64m in 1983) and the closure of agency branches, from 130 to 87.[11] By March 1984 profitability returned, to £1.2m. Reed shares hit their all-time peak in early 1987, reaching £1.80; during this period The Reed Foundation bought back shares, with the Reed family's holding rising to 70% of the company. In 1988 the firm posted a 62% profit increase to £10.54m.[12][13]

In 1986 Alec Reed was diagnosed with colon cancer and given a 40% chance of survival. He went on to completely recover, but following his diagnosis he was succeeded by Chris Kelly as managing director of Reed Group, while Reed stayed on as executive chairman and chief executive. In 1992 Reed's son James joined as a non-executive director, becoming operations director in 1994 and chief operations officer in 1995.

1995–2005[edit]

In 1995 pre-tax profits reached £8m on a turnover of £150m, up 30% on 1994. Reed launched further specialist divisions in the year, including Reed Learning, Reed Graduate and Reed Managed Services. The firm also began Reed Restart, a not-for-profit enterprise to provide ex-prisoners with rehabilitation and training. In 1999 the firm announced a 40% rise in interim profits.[14]

James Reed became chief executive in 1997, following Chris Kelly's resignation.[15] During this period the firm became one of the first two private sector companies implementing the Blair government's Welfare-to-Work programme, christened by Labour as "The New Deal".[16]

Paymaster General Geoffrey Robinson contacted Alec Reed in 1997 with a proposal to outsource some of the work of traditional job centres, with Reed providing training and support to those out of work for 1–2 years or more. Reed refused at first, changing his mind only when learning that rival agency Manpower was interested. The firm successfully tendered for a contract to provide services in Hackney under the banner Reed in Partnership.

2005–present[edit]

In 2005 James Reed took the company back into family ownership.[17]

Reed Specialist Recruitment is listed in The Sunday Times Fast Track 100 league of Britain's largest private companies. In 2018 it reported £1.05 billion in annual sales and £14 million profit.[18]

Reed.co.uk[edit]

Reed.co.uk was the UK's first online recruitment site. The launch version of the site contained few job listings, functioning more as a brochure. A second iteration, launched in 1997, featured job vacancies typed in by Reed's office receptionist in between her other duties.

The first person to obtain a job through Reed.co.uk lived 60 miles away from the hiring company. As Alec Reed later wrote: "That would not have happened had he walked into the local branch, so it opened my eyes to the internet’s potential". Reed extended its investment but, with online recruitment still in its infancy, few companies were interested. In response, Reed employee Paul Rapacioli suggested the company open up the website so that any company - including Reed customers and Reed's direct competitors - could advertise jobs free of charge, converting the site from a walled garden into an aggregator. Alec Reed later cited the move as the company's "breakthrough" online. The new site was launched in 2000 and by the end of that year had attracted 42,000 vacancies. Rapacioli received a £100,000 bonus for his suggestion. In 2007 the site moved to a fee-paying model. The site now has the largest share of all web traffic to UK recruitment sites. Reed sites collectively received 199 million visits in 2017.[19]

Advertising and sponsorship[edit]

Short Film Competition[edit]

In September 2009, reed.co.uk launched its annual Short Film Competition with a top prize of £10,000. The competition, run via YouTube, invites film makers to submit a short film of no more than three minutes in length based on a specific theme. Partners include BAFTA, Channel Four, the British Council, Total Film and Creative England. The judging panel has included Jaime Winstone, Eugene Simon, Stuart Cosgrove, Roger Chapman, Paul Weiland and Nicola Reed.

Love Mondays campaign[edit]

From 2008 to 2018 the company ran a nationwide advertising campaign fronted by actor and comedian Rufus Jones, who played James Reed as a caricature of a comic book superhero.

Controversy[edit]

In 2002, shares in the Reed Health Group (which had been demerged from the parent company in 2001) fell 25% after the surprise firing of the Chief Executive and Finance Director of Reed Health, a company demerged from the wider Reed Group in 2001.

Reed Health was initially well received by investors, with the value of its shares briefly surpassing that of its former parent company. Shortly after demerger, the firm began a programme of expansion by acquisition led by Chief Executive Christa Echtle and finance director Desmond Doyle.

In May 2002, Reed Health used cash and shares to acquire medical employment agency Locum Group, following which Echtle and Doyle tabled a proposal at Reed Health's AGM to permit them to buy further companies without shareholder approval. Had the motion been passed, Reed Health would have the power to dilute the Reed family's shareholding to the point where the family risked losing control of the company.[20] The proposal was voted down. The Reed family then opposed the reelection of Echtle and Doyle as directors, effectively firing them during the AGM. News of the pair's departure took the City by surprise. Some financial commentators, such as Patience Wheatcroft of Management Today, criticised the firings and called for better corporate governance from Reed's board.[21]

Reed later cited the incident as shaping the Reed family's decision to take the company private.[22] In April 2003 the family launched an offer to buy back shares in Reed Executive for 140p per share, an 18% premium on the pre-announcement closing price; in 2005 the family regained control of Reed Health after a premium bid. Reed companies are now privately owned and family-controlled.

Founder succession[edit]

In 2000 Alec Reed stepped down from the position of chairman to become non-executive chairman, before relinquishing all executive responsibilities in 2004 and assuming the title of founder-at-large. James Reed became chairman in 2004.

Charities[edit]

The Reed Foundation is a charitable foundation set up by Reed. The Foundation owns an 18% share of the Reed group of companies. Donations include a one million Rand grant to the Nelson Mandela Foundation to support education in South Africa, and two million pounds to the West London Academy in Ealing, later renamed the Alec Reed Academy.[23]

The Big Give is a Reed Foundation initiative to introduce donors to charitable projects in their field of interest.[24] Launched in 2007, the website holds details of over 7,500 charities. It reports raising £110m to date, distributed to approximately 2800 different charities.[25]

In 1989 Alec Reed founded Ethiopiaid, a charity that works in Ethiopia to mitigate poverty, ill health and poor education.[26]

Awards[edit]

Reed was ranked #28 in Glassdoor's Top 50 Best Places to Work 2019, the highest placement for a recruitment company in the list.[27]

See also[edit]

References[edit]

  1. ^ "Alec Reed: How I got lucky and made £60m". MoneyWeek. 2009-12-18. Retrieved 2018-03-29.
  2. ^ Steve McCormack (6 July 2006). "A-Z of Employers: Reed". Independent. 26 September 2006. Archived from the original on 2006-09-26. Retrieved 2 March 2012.
  3. ^ "Richard Post, former director at Reed Interims Limited, Northampton". www.checkdirector.co.uk. Retrieved 2017-12-11.
  4. ^ Huppert, Julian. "Julian Huppert Liberal Democrat MP for Cambridge urges teenagers to sign up for National Citizen Service". JulianHuppert.org. Retrieved 12 September 2014.
  5. ^ "Promoting social action: encouraging and enabling people to play a more active part in society". Gov.uk. Retrieved 12 September 2014.
  6. ^ Online Recruitment: reed.co.uk most visited in 2009 and breaking records in 2010
  7. ^ "Google brings its job search tool to the UK". IT PRO. Retrieved 2018-08-16.
  8. ^ Clark, Andrew (14 November 2011). "Family firms call for help to remain going concerns". The Times Digital Archive. Web. Retrieved 25 January 2018.
  9. ^ "England Keeps Highland buoyant". The Times Digital Archive. Web. 25 October 1983. Retrieved 25 January 2018.
  10. ^ "Company News". The Times Digital Archive. Web. 22 May 1973. Retrieved 25 January 2018.
  11. ^ "Losses continue at Reed Executive". The Times Digital Archive. Retrieved 25 January 2018.
  12. ^ "Reed Executive forecasts loss after poor start". The Times Digital Archive. Web. 14 October 1980. Retrieved 25 January 2018.
  13. ^ Tate, Michael (5 July 1988). "Reed Executive posts 62% profit increase to £10.54m". The Times Digital Archive. Web. Retrieved 25 January 2018.
  14. ^ Lea, Robert (29 September 1999). "Profits 40% up at Reed Executive". The Times Digital Archive. Web. Retrieved 25 January 2018.
  15. ^ [ttps://www.thetimes.co.uk/ "Reed son appointed new chief"]. The Times newspaper. London. 22 April 1997. Retrieved 25 January 2018.
  16. ^ Ayres, Chris (12 September 1981). [ttps://www.thetimes.co.uk/ "Reed sees shift to full-time employment"]. The Times Digital Archive. Web (paywall). Retrieved 25 January 2018.
  17. ^ Wary, Richard (5 April 2005). "Reed Executive Back In Family's Hands". The Guardian. Web. Retrieved 25 January 2018.
  18. ^ TWK. "League table - Fast Track". Fast Track. Retrieved 2018-07-12.
  19. ^ Gale, Adam. "James Reed: The Man Who Took Recruitment Online". ManagementToday.co.uk. Management Today. Retrieved 2 March 2018.
  20. ^ Davey, Jenny (1 March 2003). "Majority shareholder maintains his silence". The Times Digital Archive. Web. Retrieved 25 January 2018.
  21. ^ Wheatcroft, Patience (1 April 2003). "The Human Factor". Management Today. web. Retrieved 25 January 2018.
  22. ^ Steiner, Rupert (1 April 2006). "Army recruited Reed chief into enterprise". The Sunday Times Digital Archive. web. Retrieved 25 January 2018.
  23. ^ "Ofsted criticises London academy standards". Guardian. 7 March 2006. Retrieved 23 November 2011.
  24. ^ Ford, Emily (11 December 2009). "A match of two halves". The Times Digital Archive. Web. Retrieved 25 January 2018.
  25. ^ "Dawn Varley: The Big Give needs to be bigger, but I like it". Third Sector. 2017-11-28. Retrieved 2017-12-23.
  26. ^ "Ethiopiaid - Charity Details - The Charity Commission". Charitycommission.gov.uk. The Charities Commission. Retrieved 23 December 2017.
  27. ^ "REED Reviews". Glassdoor. Retrieved 2018-12-06.

External links[edit]