We have THREE MONTHS to save the economy
As boss of Britain’s biggest recruitment firm, James Reed predicts unemployment could soar to FIVE MILLION and warns . . .
SINCE the start of the lockdown, James Reed has been running his billion-pound family business from a makeshift office in his attic.
As Britain’s biggest recruitment company, REED is uniquely wellplaced to see the devastation the coronavirus is wreaking on the economy and how desperately the nation needs to get back to work.
‘The job numbers on our website – and we are the principal one in the country – are down 68pc from peak to trough,’ says Reed.
‘It has contracted dramatically even though there are some sectors that are really busy, such as healthcare.
‘The fall has been further and faster than in the financial crisis in 2008-9.
‘Our data would suggest that if things carry on as they are, we could end up with more than five million people unemployed. It would take us back to the 1930s.’
But there is a sliver of hope. The 57 year old believes that if the economy can be revived in the next three to four months, we might avoid a 1930s-style slump.
‘If not, it is a real danger,’ he warns. ‘How we open up the economy and resume business is critical.’ He believes the Government furlough scheme was needed as an emergency measure, but risks storing up problems for the future.
‘It buys everyone more time, both workers and businesses, but at what cost? The bill will be massive and it is just kicking the can down the road.’
REED, which was founded in 1960, celebrated its 60th anniversary in business on May 7, in the middle of lockdown.
‘The virus has had a pretty dramatic effect on us. The business has changed more in six weeks than in the previous six decades.
‘We had to move our people to working from home within two weeks. There will be a need for new skills. The biggest issue we will have is working with Covid, because it hasn’t gone away. Workplaces will have to adapt.
‘The good side is that 20 years ago, or even ten years ago, we would have found it much harder – but now we have the tech.
‘I worry most about the younger generation and how it will be much harder for them. I think it could take three years for the economy to come back fully and if you are at a key stage of your life that is a crucial time and could leave a scar.’
The company was founded in 1960 by Reed’s father, Sir Alec, now 86 and still working in the business. REED has grown from those small beginnings to become a global recruitment powerhouse. Reed himself joined in 1992 after graduating from Harvard Busifor ness School. Since then, REED has become a billion pound business receiving 50m job applications a year.
As well as running the business, Reed, now chairman, has also written three books aimed at helping people with their careers.
What has he learned from his dad? ‘Well, Hounslow is near to Heathrow, which was expanding after the Second World War, so some of his success was luck.
‘But he says success is as easy as pie: P for passion, I for ideas and E
energy, that is his mantra. His other saying is “Have an idea every day”, so I try to do that.’
‘He started work as an office boy at 16 and founded the company at 26, so he has been working for 70 years, but I have told him he is not allowed to retire. My daughter Rosie works in marketing so we have three generations.’
He has inherited his father’s spirit of philanthropy. The biggest shareholder in REED is a charitable foundation which owns around 18pc. Sir Alec founded The Big Give in 2007, which matches donations and has raised around £120m for various charities.
Covid-19 is the most serious crisis Sir Alec has endured in his marathon career.
‘He says this is the worst he has ever seen,’ says his son. ‘Our income as a business has halved over this period. We have 500 people on furlough, plus 1,500 temp staff too out of 21,000 in total.’
Father and son have both forfeited their pay for at least as long as the lockdown lasts.
‘If the highest-paid people in a company take a cut you can save quite a few jobs. We are a family business, it feels right,’ says Reed.
‘We have to make tough decisions but I want to do it with a clear conscience.’
He is the co-founder of the Keep Britain Working campaign, which he helped launch after predictions the economy could shrink by 35pc due to the pandemic, throwing millions on to the dole.
The initiative tries to redeploy workers from struggling industries to sectors where there is demand for staff, such as healthcare or supermarkets. Does he see any silver linings? ‘I hope people who are lower paid are treated better after this, because it has become clear how important they are.
‘There has been huge inequality in pay and rewards – it needs to change so we can emerge as a better economy and society.’