Reed (company)

Reed
Reed Executive
Employment Agency
Industry Recruitment
Founded Hounslow, United Kingdom 7 May 1960 (1960-05-07)
Founders Sir Alec Reed
Headquarters London, United Kingdom
Number of locations
 180
Key people
 James Reed, Chairman; Richard Post CEO
Services Employment agencies, recruitment, human resource consulting
Owners Privately owned

Reed is an employment agency based in the United Kingdom.[1] The company was founded in 1960 by Sir Alec Reed CBE, and is currently chaired by his son, James Reed. Reed also offers training and HR consultancy services. The company’s website, reed.co.uk, was established in 1995 and doubles as a job site. In 2014 Alexa ranked Reed.co.uk as the no.1 UK employment agency website.

As of March 2012 Reed has more than 3,000 permanent employees working across 425 business units in 180 locations worldwide.[2]

Reed group companies

Reed Group claims 3000 employees across 441 business units and 163 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 (including Qatar and Dubai), Asia Pacific and continental Europe.[3][4][5]

The company has four main divisions:

Charities and social initiatives

Founder Sir Alec Reed is a noted philanthropist, receiving a Knighthood in 2011 for services to business and charity. The Reed group of companies operate or support a number of charitable initiatives, including The Reed Foundation, The Big Give, Ethiopiaid, and WomanKind Worldwide.

The Reed Foundation is a charitable foundation set up by Sir Alec Reed. The Foundation owns an 18% share of the Reed group of companies. Funds go towards supporting charitable projects and one-off donations. Other 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. The Academy is for 4 - 18 year olds and has a sports and enterprise specialism, supported by a £2million pledge by Alec Reed.[7]

The Big Give is a Reed Foundation initiative to introduce donors to charitable projects in their field of interest. Launched in 2007, the website holds details of over 7,500 charities. It reports raising £50m to date, distributed to approximately 10,000 different charities. Its Board of Philanthropists includes Sir Charles Dunstone, Sir Adrian Cadbury, Lord Bell, Jon Snow and Martha Lane Fox. The Big Give's main initiative is its 'Christmas Challenge’.

Ethiopiaid is a charity that works in partnership with community projects in Ethiopia. Founded by Alec Reed in 1989, it aims to tackle the problems of poverty, ill health and poor education in Ethiopia, raising funds for trusted community partners located primarily in the capital Addis Ababa. The charities work focuses upon poverty alleviation, healthcare and education. Launched with a £1m donation from Alec Reed, the charity has raised £28m in partner donations in 25 years.

Womankind Worldwide is an international women’s rights and development charity to help challenge discrimination and violence, and to increase women’s participation in their community. Launched in 1989 by Alec Reed and Kate Young, it provides funding and expertise to women’s rights organisations in 14 countries across Africa, Asia and Latin America. The charity claims to have reached 18 million women through 35 partner organisations. Patrons include Kate Adie OBE, Helena Kennedy QC, Lord Lester of Herne Hill QC and Professor Amartya Sen.[8]

History

1960-1971

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, as businesses needed help to find staff. 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 evenings and weekends in an estate agency in Hounslow. The estate agency’s premises was split into two businesses, with one side selling property and the other side selling carpets. Noticing that the carpet business was struggling, Reed approached the owner and offered to rent the carpet portion of the premises for his fledging employment agency, funding the launch with £75 taken from his Gillette pension fund. On Saturday 7 May 1960, the 26-year-old Reed opened the first branch of Reed Employment in the estate agent's office, opposite Hounslow bus station. Reed’s former colleagues at Gillette provided him with his first few placements. Turnover grew rapidly and the firm expanded to a second branch in Feltham. Reed would later write 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 would later claim 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 easily seen by the public.

1971 flotation

The end of the 1960s saw a bull market in UK share prices, prompting stock market floatations 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 (approximately £8.44 in 2014), a price/earnings ratio of 13.1 and a yield of 4.4%. Alec Reed retained a third of the company, gave one third to be divided among his three children and floated the remaining 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 and averaged 80 times offer value for most of the 1990s. The Reed Family retained effective control of the company post-floatation, through the combination of Alec Reed's shareholdings and that of his children. Alec Reed would use part of his floatation windfall to found Reed Business School in 1972.

Alec Reed would later describe the floatation 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. (Medicare was founded in 1973 and sold to Dee Corporation in 1985 for £20million; Reed used his £5m windfall from the sale to start the Reed Foundation, which owns 18% of the Group’s shares).

1972-1983

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, which boosted salaries and thereby Reed’s commission.

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 would come to be known as Reed Health, Reed Finance and Reed Computing, among others. All were established under a holding company (Reed Executive), such that failure in one specialist division would not bring down other divisions. By 1979 profits had returned, with the company 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 already had experience of magazine publishing with its 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

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. 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 1986 Alec Reed was diagnosed with colon cancer and given a 40% chance of survival. He went on to completely recover, but amid Reed's diagnosis Chris Kelly succeeded 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

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.

James Reed became chief executive in 1997, following Chris Kelly’s resignation. 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. Paymaster General Geoffrey Robinson contacted Alec Reed in 1997 with a proposal to outsource some of the work of traditional job centres, 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. Reed forgot to mention the conversation with Robinson to his son James (by then Reed Group’s chief executive), leading James to assume that the call was a hoax, before Robinson later phoned to confirm the discussion. The firm successfully tendered for a contract to provide services in Hackney under the banner Reed in Partnership.

Reed.co.uk

Reed.co.uk was the UK's first online recruitment site. The launch version of the site functioned as a brochure and contained few job listings. A second iteration, launched in 1997, featured job vacancies typed in by Reed’s office receptionist in between her other duties. Significantly, 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 sought to offer their vacancies through the internet. In response, employee Paul Rapacioli suggested that Reed open up its 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 would later cite the move as the company’s "breakthrough" online. Calling this strategy "Freecruitment", 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. Hitwise reports that the site now has the largest share of all web traffic to UK recruitment sites.

Advertising and sponsorship

Short Film Competition

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 for the 2014 competition included Jaime Winstone, Eugene Simon, Stuart Cosgrove, Roger Chapman, Paul Weiland and Nicola Reed.

Love Mondays campaign

In January 2008, a nationwide advertising campaign was launched promoting reed.co.uk. The advertising introduced the firm's current slogan of 'Love Mondays’, with print and poster ads featuring the device of a handwritten Post-It note. The Love Mondays campaign is now fronted by actor and comedian Rufus Jones, who plays James Reed as a caricature of a comic book superhero.

Controversy

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, for which Chief Executive Christa Echtle and finance director Desmond Doyle were advised by James Wellesley Wesley at Granville Baird.

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 that would permit Reed Health's managers 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. 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; two non-executive directors resigned in protest.

Reed would later cite the incident as shaping the Reed family’s decision to take the company private. 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 hostile bid. Reed companies are now privately owned and family-controlled.

Founder succession

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.

See also

References

  1. ↑ 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.
  2. ↑ "About Reed". reedglobal.com. Reed. Retrieved 2 March 2012.
  3. ↑ "About Reed". reedglobal.com. Reed. Retrieved 2 March 2012.
  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. ↑ "Ofsted criticises London academy standards". Guardian. 7 March 2006. Retrieved 23 November 2011.
  8. ↑ "International Women's Day". Retrieved 12 September 2014.
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