Reed Boss on AI Challenge in Hiring: ‘People Like Dealing with People’”

TL;DR: Reed CEO James Reed warns AI is “destroying jobs quite quickly” in certain sectors whilst developing AI recruitment agents for small businesses. UK vacancies fell for the 39th consecutive quarter, with graduate roles declining from 180,000 postings in 2021 to 55,000 last year. Despite AI tools, Reed emphasises human interaction remains crucial for persuading candidates to move roles.

James Reed, chief executive of Britain’s largest recruitment agency, faces his second technology revolution, comparing 2025 to the internet café days of 1995. As AI reshapes the labour market, Reed is developing AI agents whilst warning of significant job displacement—a “jobs drought” he attributes to unfortunate timing between rising employment costs and automation opportunities.

AI Agent Development

Reed is trialling an AI agent service targeting small businesses, designed to search the company’s database of millions of jobseekers to create candidate shortlists. The tool identifies “passive candidates”—people fitting job criteria but not actively seeking roles—though final decisions remain with humans.

Reed admits candidly: “It doesn’t work very well. The website didn’t either when it started.” After 18 months of development, the tool works but needs improvement, and Reed emphasises it’s “not a panacea.”

Human Touch Remains Essential

Despite AI’s efficiency in identifying candidates, Reed highlights its limitations in persuasion and relationship-building. “If you want someone to do something, don’t send them an email, ring them up,” he explains. “But that’s the thing—AI sends you emails.”

The recruitment chief believes assessing and motivating workers to change jobs requires human interaction: “The challenge is getting people to move… People like dealing with people.”

Market Decline and Job Losses

The UK lost 9,000 vacancies between July and September, marking the 39th consecutive quarterly fall. Total vacancies dropped 13.8% year-on-year, pushing unemployed people per vacancy to 2.4. Graduate roles show particularly alarming trends, declining from 180,000 postings in 2021 to 55,000 last year.

In Reed’s client survey, 15% reported reducing hiring due to AI, whilst 22% blamed Budget national insurance increases. Reed is highly critical of government employment legislation, claiming clients cancelled recruitment immediately after October’s Budget.

Timing and Transformation

Reed identifies “unfortunate” timing: increased employment costs and stagnating growth make hiring unattractive precisely as AI emerges that could replace human work. “Businesses will say, hang on, maybe we won’t hire, or they will look at automation,” he observes.

Whilst AI can be “transformative,” exactly how it might disruptively change recruitment remains unclear. Reed expects AI to become “part of our service offering” rather than consuming everything else, as “a lot of people don’t want to interact in that way.”

Looking Forward

Reed worries about “odd” contradictions in today’s economy, where growth continues—albeit “pathetically small”—as vacancies fall. The threat to jobs seems more imminent than huge benefits, though he attempts to balance concern with pragmatism: “It’s an interesting time. I don’t want to depress your readers.”

The contrast between AI’s promise and current reality reflects broader industry tensions, where technological capability outpaces proven value whilst potentially eliminating the roles it claims to enhance.

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