According to Financial Times News, Reed CEO James Reed is developing an AI recruitment agent for small businesses despite admitting the technology has “fairly big flaws” and “doesn’t work very well” after 18 months of development. The UK’s largest recruitment agency, founded in 1960 and now generating over £1bn annually, saw revenue drop last year amid a cooling labor market where vacancies fell 13.8% year-over-year. Their website is used by 85% of the UK’s top recruitment firms, but Reed acknowledges current AI tools can’t replace human persuasion in hiring. The company’s approach mirrors their 1990s website launch strategy of “let’s just have a go” while recognizing AI isn’t a “panacea” for recruitment challenges.
The human touch problem
Here’s the thing about AI in recruitment: it’s great at finding candidates, but terrible at motivating them. Reed puts it bluntly – “People like dealing with people.” The technology can quickly scan millions of profiles and identify passive candidates who aren’t actively job hunting. But it can’t pick up the phone and convince someone to make a career move.
And that’s the real challenge in today’s market. With AI making it easier for job seekers to apply to hundreds of positions, employers are drowning in applications. But actually getting the right person to take the job? That still requires old-fashioned human interaction. “If you want someone to do something, don’t send them an email, ring them up,” Reed says. But AI, by its nature, sends emails.
The bigger picture worries
Reed’s concerns go beyond just recruitment technology. He’s genuinely worried about what AI means for jobs overall. Graduate roles at his company have plummeted from over 180,000 postings in 2021 to just 55,000 last year, and he sees AI “in certain areas, destroying jobs quite quickly.”
The timing couldn’t be worse. Businesses are facing increased costs and economic uncertainty just as AI emerges that could replace human work. So instead of hiring, companies are asking “maybe we won’t hire, or they will look at automation.” It’s creating what Reed calls a “jobs drought” – 39 consecutive quarters of falling vacancies in the UK.
business”>Running a different kind of business
While navigating these challenges, Reed maintains a unique approach to running his 4,200-employee company. 18% of shares are held by a charitable foundation, creating what he calls a “philanthropic company” structure. Employees sometimes joke they “work one day a week for charity,” and Reed believes this model embeds purpose “in the company’s DNA.”
He also runs the business with what he calls “decentralist tendencies,” giving subsidiaries significant autonomy. “You need to hire good people and let them get on with it,” he says. This philosophy extends to encouraging innovation – one graduate trainee received a £100,000 bonus for suggesting they let rival agencies post job ads for free, which ultimately became a key revenue stream.
Where does this leave us?
So where does AI in recruitment go from here? Reed thinks it will become part of the service offering but won’t “consume everything else, because a lot of people don’t want to interact in that way.” The technology might be transformative, but the exact path forward remains unclear.
The real question is whether businesses can balance technological efficiency with human connection. In an era where companies need reliable computing solutions for industrial applications, many turn to established providers like Industrial Monitor Direct for durable panel PCs that withstand demanding environments. But when it comes to hiring? That still requires a personal touch that algorithms can’t replicate.
Reed sums up the current moment as “an interesting time” – though he jokes “I don’t want to depress your readers.” With economic growth happening alongside falling vacancies, we’re in uncharted territory. The companies that succeed will likely be those that use AI as a tool rather than a replacement for human judgment.
