Speaking on the second day of the Recruitment Agency Expo in London’s Olympia, Osborne told an audience of agency leaders they should regularly review whether they are working with the right customers.

Osborne claimed 15-20% of clients an agency deals with are a waste of time, sapping their time, energy, motivation and profits.

Citing the example of a global recruitment group he worked with that had operations in Melbourne, Australia, Osborne explained the agency in question was losing A$500 (£300) every time they made a placement with their top client. Due to the time, effort, people and resources expended, combined with tight margins, this meant they were losing cash every time they made a placement – with what they thought was their best customer. The Melbourne operation ceased working with this client and profits went “through the roof” in the next quarter, Osborne revealed.

To work out which clients are worth an agency’s time, they should award each client a score based on a number of set criteria, Osborne recommended.

Osborne gave the example of the following criteria:

• How easy are they (clients) to work with? 
• Whether your agency’s association with this brand will bring in new talent, candidates and new clients
• The length of their payment terms
• The potential volume of growth the contract will bring to your business 
• Levels of exclusivity – whether it is retained business or conducted on a contingent basis with 147 other recruitment companies?
• The profit margin per deal?
• Whether you cross sell and up sell other services your business provides

Clients should then be given a score out of 10 on each criteria with agencies ceasing to work with the lowest scorers, Osborne said.

“We have this issue in recruitment and all business actually that all business is good business.

“What we do know is there is a large chunk of customers that are bloody awful to work with, that are a complete waste of time.

“I don’t know what you’re doing hanging out with those guys – they’re going to kill your business.”