2 weeks Ago
UK jobs market is in a slow-motion car crash...
and Labour’s tax hikes and workers rights laws risk making it even worse: A dire warning from recruitment boss James Reed By Ruth Sunderland Updated: 15:42, 26 October 2024 e-mail View comments James Reed absolutely adores work. He whizzes in to his office in central London on his dark blue Vespa feeling full of beans and declares his love of Mondays. All this is just as well, since he is the boss of Britain's biggest recruitment business, REED, which was founded by his father Sir Alec, who is – you guessed it – still working at ninety years young.
This unbridled, unapologetic enthusiasm for work is refreshing, given that more than nine million Brits have dropped out of the labour force and are 'economically inactive'. Plus the fact that work seems to have become a four-letter word in many circles and the Labour party seems unable even to say what a worker is. Reed, 61, is an evangelist for the positive power of work to transform people's lives, help them be socially mobile and even – whisper it – make them happy.
James Reed goes to work on a Vespa He would like to see a nationwide marketing campaign to champion the joys of a fulfilling job. 'We need to do a marketing campaign to support work. Work is wonderful, I know so many people who love their jobs.
' 'Our company purpose is just four words - it is very simple. 'Improving lives through work.' The boss of Britain's biggest recruitment firm has issued a stark warning that the jobs market is 'in a slow motion car crash' and that Labour policies risk causing further damage.
Speaking ahead of this week's Budget, James Reed, who runs the company of the same name, highlighted a sharp decline in the number of staff firms are seeking to hire. He fears that widely-rumoured moves by Chancellor Rachel Reeves to hike employers' National Insurance will make matters worse because firms will become even more reluctant to take on more employees. A slowdown in hiring would act as a curb on growth – which Labour insists is at the heart of its economic agenda.
Reed also warned the government's plans to give workers new rights from day one in the job will make employers much more cagey about who they recruit which could be bad for diversity and non-mainstream candidates. Reed pointed to official figures showing the number of job vacancies has fallen for the last 27 periods in a row. 'This is what is worrying me.
The decline has not had the attention it deserves and it is going to get worse before it gets better.' He said that at Labour's investment conference earlier this month, the government trumpeted investment of £65bn coming into the country, securing 38,000 jobs. 'But the very next day the officials statistics show an estimated decrease in payrolled employees of 35,000 between July and August.
' 'The government's agenda is to grow the economy but this trend is the opposite of that.' He said increasing employers' National Insurance (NI) contributions, a widely touted Budget measure, 'is a tax on jobs, literally.' Chancellor Rachel Reeves will announce her first Budget later this week 'If they put it up, it has an effect on how many jobs employers are willing to create and it has an effect on wages longer term because they may be less willing to give a pay rise.
' The current rate of NI for employers is 13.8 percent but there has been speculation Reeves will hike it, possibly by 2per cent. She has faced charges of hypocrisy over the potential move because Labour promised not to raise taxes on working people.
'Is it a tax on workers? It is a tax on jobs and only workers have jobs,' Reed said. 'In an environment where job vacancies are in decline I am concerned it would be a decision the government would come to regret.' He also warned the government against creating a 'two-tier' labour market that favours public sector employees over those in private enterprise.
Reeves has been attacked for plans to impose national insurance on employers' pension contributions - but sparing the public sector. He said: 'All workers are important and I think they should be treated fairly. It [differential treatment] is unfair on the most basic level.
As a country we are quite quick to tune into unfairness and it feels wrong to me as a general starting point.' 'Creating a two-tier workforce is a mistake. People working in agriculture produce the food we eat and that is pretty important I would say.
All sorts of jobs are really important in the private sector and make the world go round. To somehow create that distinction I would not advise or agree with that.' Reed is married to Nicola, who runs a business called Beeble which makes honey whisky from hives in their home in Wiltshire.
He hands me a bottle of his own label 'Jimmy Reed' version of the tipple, that she made from a hive on the roof of his HQ, tucked in a quiet corner of Covent Garden. The couple has six children, three boys and three girls. Daughter Rosie works in the business and he hopes one of his sons will return to the company after taking time out to do a finance and accountancy qualification.
He says it is 'never tricky following in my father's footsteps. It probably helps that I have a thick skin - the skin of a crocodile.' How does he feel about nepotism? 'Guilty as charged,' he laughs.
'I am the beneficiary of nepotism, but I feel after 30 years in the business, I think I can say I did as good a job as anyone.' 'My dad is a brilliant entrepreneur, he is 90 and he still rings up. He was giving me a hard time earlier this week, which I like.
I love that. He started working when he was 16. 'I am a big believer in a multi-generational workforce.
My dad is from the Silent Generation but I joke he didn't get the memo.' REED's single biggest single shareholder is its charitable foundation which owns 18percent. The rest is held by the family, which bought the company back from the stock market in 2003.
'We call ourselves a philanthropy company,' he says. 'One day a week we work for charity. We employ 4,500 people directly and they really value that.
' Sir Alec founded The Big Give in 2007, which matches donations. 'Last year we raised £33m in a week on our Christmas challenge, we want to beat that,' James says. He is in a good position to assess the new government, having seen a stream of Prime Ministers and chancellors come and go in his time at the top.
'I have been CEO since 1997 and I have seen there have been nine Prime Ministers. John Major was my first.' 'They all say they want growth and then they do various things that don't help achieve their goals.
' 'The other thing that worries me is AI,' he says. 'It could be a perfect storm.' Read More How to stop Labour taking your inheritance: JEFF PRESTRIDGE reveals the steps to take NOW Does he worry AI could in future make his own business redundant by using bots to recruit for firms? 'We have had people saying things like this for years.
People ultimately deal with people - ultimately AI provides tools we can use to do a better job.' He adds: 'AI is already leading to job losses in areas like IT and finance. AI is writing a lot of code.
Our tech recruitment specialism is very quiet and I think that is interesting. A lot of work of technologists is now done by technology.' The other big change, he says, is the ageing population.
A younger generation is rising to the top with a very different set of attitudes. 'I am a tail-end baby boomer and we are leaving the work place. We are a large cohort with certain characteristics, one of which is we were very competitive with each other.
Gen Z, the zoomers, have a completely different attitude.' 'That competitiveness is less important to them. They are not driven by the same forces.
' 'People will end up working longer, a lot of them because they want to,' he adds. Would he like to work into his nineties, like his Dad? 'Well I don't know if I will live as long, but I would like to carry on for as long as I can.' Age: 61 Family: Married to Nicola and they have six children Lives: in London and Wiltshire Drives: Vespa GTS300 or VW Transporter (when with family) Favourite book: The Man Who Planted Trees by Jean Giono Who (living or dead) would he invite to a dinner party and what would he serve? Satoshi Nakamoto, which is the name used by the presumed pseudonymous person or persons who developed bitcoin.
.. because I am curious to see who'd turn up.
I would serve mutton curry, my signature dish. What job does he think he would be really bad at and get the sack? Pilot..
. I shouldn't be allowed anywhere near a cockpit. Skills are important.
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