Why I'm Closing Proactive Talent: A Letter from CEO and Founder, Matt Staney

With a heavy heart, I announce I will be winding down Proactive Talent at the end of April 2023. After seven and a half years of success, we have decided to close the company, for now, due to the current economic environment. While this was not an easy choice, I believe it is the best course of action for myself and my team.

Over the years, Proactive Talent has accomplished a lot. Starting as a solo consulting firm in 2015, we grew to $6MM in ARR with over 50 passionate talent acquisition experts. During that time, we've helped over 500 companies build world-class recruiting programs and transform the way they attract, hire, and retain top talent. We worked with many successful brands to build their employer brand and recruiting strategies infusing DE&I throughout, hired thousands of talented individuals with our OnDemand Recruiting services saving them millions of dollars on contingent search fees and expensive RPOs, and implemented 400+ instances of recruiting tech, including ATSs, CRMs, and AI tools modernizing recruiting tech stacks.

We successfully weathered the storm of the COVID-19 recession of 2020 while avoiding layoffs. Then, in 2021, we scaled up to meet client demand as companies began hiring at a fever pitch due to the knowledge worker market adjusting to remote work amidst a raging pandemic. However, this was followed by a reversal and an even more drawn-out hiring slowdown in 2022 due to another economic crisis, which had an unfortunate ripple effect. As our clients suffered, we suffered along with them. These challenges have taken a toll on my team and me over the last year as I worked through burnout and depression to keep people employed and fought against the macroeconomic trends as they regularly shifted. By deciding to close now, I can give everyone at the company a soft landing, which is very important to me.

Proactive Talent was always intended to be a practitioner-for-hire, project-based, lifestyle company helping our clients to build modern recruiting programs and ultimately become self-sufficient, relying less on expensive outsourcing models like traditional recruitment marketing agencies, contingent search firms, or RPOs. My goal was to work with and learn from talented TA professionals, with the companies we wanted to work with, on projects that inspired us, and to build an amazing culture of like-minded individuals working together on what we're passionate about. We lived this dream for the last seven amazing years. However, these goals and that dream lifestyle have become unattainable, at least, and unfun, at best, in the current environment.

I've already announced on LinkedIn I am closing my company, so I don't mind being transparent. Many folks have reached out to offer support, a chat, and share their stories of what our firm meant to them, and I greatly appreciate it. Through these discussions, I've also come to understand that some fellow entrepreneurs and agency-owner hopefuls in the industry may feel discouraged by my story. Don't be. I'm not sharing this as a cautionary tale but in hopes that others looking to build a business with a similar model can learn from my experience. 

We didn't over-hire like many companies that have gone through layoffs this past year. We hired full-time staff only when we knew we had a book of projects with ink on paper and didn't overspend on marketing. For the past seven years, 90% of our business came from my network and connections built over a decade as someone known for pushing the boundaries in recruiting and employer branding as an in-house leader and speaker on the conference circuit, as well as referrals from current and past clients and colleagues. 

So, how did this happen? We were a business built in a growth economy supporting growth companies. We had a heavily-weighted tech client base that we were beginning to expand with clients in life sciences, clean energy, healthcare, and biotech, to name a few. However, the heart of the issue was our consulting service business model, which sought to work as an extension of our client's teams to build and execute a strategy, then support the delivery while helping them to build their internal capabilities to free themselves from big-box vendor reliance. We achieved this many times. It worked well in a growth economy, where plenty of new companies needed help once a current client "graduated".  

However, in the current tumultuous economic climate, striving for this goal, although noble, can ironically result in us working ourselves out of a job if we successfully implement it effectively. And we did. This understandably puts a lot of pressure to continue to bring in new business. Still, we always managed thanks to amazing repeat clients, customer referrals, and a supportive network of partners. 

I think my biggest mistake was thinking that when the market changes and an inevitable recession hits, companies would see the advantage of agile staff augmentation providers like us to stay lean, rather than the usual game of building out a large recruiting function internally, only to lay them off when hiring slows. Instead, after the hard lessons and layoffs of the 2020 COVID-19 recession, companies went on a rampage hiring full-time recruiters, sourcers, and recruitment marketing talent in 2021. I remember in the first half of '21 when there were more recruiting job openings than engineering ones. Talent Acquisition compensation increased 15-20% that year alone, adjusted for inflation. You know what happened next. When 2022 hit, inflation started getting out of hand, the war in Ukraine kicked off, supply chain issues worsened, the fed began raising interest rates, and by the summer, recruiter layoffs began yet again and haven't stopped since.

Our complimentary services, such as programmatic advertising and agency of record services, where clients are locked into longer-term contracts, and it's easier to see a short-term ROI, remained untouched. However, the demand for the meaningful work we enjoyed doing, the real consulting work that helped companies be proactive and build their employer brand capabilities, optimize their recruiting strategies, and modernize their infrastructure by implementing new technologies, slowly dried up in the last half of 2022. The desire in the market to focus on the long-term, at least in my experience and in the thousands of companies we talked to and reached out to, slowly and painfully disappeared. Companies that signed contracts with us at the end of '21 and early '22, by the beginning of Q2 2022, were now implementing hiring freezes and canceling those strategic consulting projects we hired staff to take on. Dozens of companies late in our sales process started to drop out due to budgets being slashed.

Our sales and marketing teams worked tirelessly to replace the millions of dollars in business we lost suddenly in the first quarter of 2022 to the point of burnout. Unfortunately, this slowdown was dragging on longer than the last, more clients became affected, and we had to make the difficult decision to begin layoffs by the summer of 2022. As things progressed toward the end of 2022, it became clear to me that the mission we were on and the gig-economy lifestyle we loved were no longer attainable in this market, and the demand for these strategic services had slowed. We could have chosen to continue with a small team doing the short-term, quick ROI work for the remaining clients we had left and try to ride it out, but that wasn't the kind of work I started this company for or that we wanted to do. Continuing to pound the sand like that felt worse than the other options and was taking a toll on my mental wellbeing

We could have also sold out during a down market for bottom dollar to the half dozen big agencies that reached out, but that wasn't the ending I wanted. Instead, I worked with my leadership team to prepare a contingency plan to close Proactive Talent our way, with integrity and our heads held high. Over the last 6 months we did the work to build and execute a plan that ensured that all our people had a soft landing, our clients had a smooth transition, and the company could be put into sleeper mode without any debts. We decided to get out clean and then work together as a tribe to help each other land our next adventures.

Throughout all this, I have been transparent about our layoffs and the talented individuals we had to say goodbye to. As a result, over 80% of our employees have already landed new positions. The remaining team, impacted by the company's closure, meets weekly to assist each other with job opportunities, network connections, and provide resume feedback and emotional support as friends during this challenging period. If you are looking for a great recruiting leadership or employer branding talent, a content marketer, chief of staff, or a finance manager - hit me up.

These are all people I had to let go of, yet they continue to come together with me as a tribe to help each other week after week and day after day. Some folks continued to work for days or weeks after their last day while collecting severance and applying for jobs to ensure their remaining co-workers and clients were in a good place. It's the greatest example of integrity and teamwork I've ever experienced. I'll remember the end of my company even more fondly than the beginning of it because, at this moment, we are showing our humanity and sticking to our values. We have become more than a group of people bringing our skills together to build a successful business, we are a tribe of talented humans with a shared set of values, and we are living those values down to the last day. 

I want to express my heartfelt gratitude to all who have been a part of the Proactive Talent tribe, including our past clients and partners. The relationships we formed along the way made Proactive Talent such a remarkable adventure. Those relationships will continue to endure long after our doors have closed.

As for my plans, my focus right now is on wrapping up our remaining client projects and supporting all our former employees in finding their next opportunities. Moving forward, I plan to continue as Co-Founder at Talent Brand Alliance, where we are continuing to build the first association for talent brand practitioners and share best practices and research on the industry. I will continue contributing my voice on LinkedIn and here on the Proactive Talent blog for now.

Furthermore, after a short sabbatical this summer to heal my burnout, I am excited to explore new opportunities in the industry, specifically in what's next in HR Tech or in a VP of Talent role at a company looking to build a truly world-class recruiting function.

As I close this chapter, I want to express how incredibly proud I am of everything my team and I have accomplished with Proactive Talent. Building and leading this company has been an invaluable learning experience for me. I'm truly blessed to have had the opportunity to create something that made a significant impact, advanced the careers of many talented individuals, and reflected my values and passion for this industry.

I want to express my deepest gratitude to our employees and partners who have worked tirelessly to help us achieve our mission to date. We could not have done this without you. Again, thanks to our clients for trusting us with your talent acquisition needs. It has been a true honor to partner with you. I want to reiterate that our team will work hard to ensure smooth transitions for ongoing projects or contracts. Thank you for being a part of our journey. I hope that our paths cross again in the future.

While this was the most difficult decision I've ever made as CEO--and it takes a lot of hard work and conversations to close a business like this--I feel 100% that it was the right one for our team. It's never easy to say goodbye, but I am confident this is just the beginning of a new chapter for all of us. We will continue to push the boundaries of the talent acquisition industry and find new and exciting ways to help companies build world-class recruiting programs, even if we can't do it together right now.

I encourage everyone to stay in touch and keep the conversation going. Let's continue to share ideas, best practices, and insights to help move this industry forward. I am excited to see what the future holds, and I hope we can all continue to work together to make a positive impact and bring the human back to human resources, even in the era of AI.

Sincerely,

Matt Staney (aka Will)
CEO & Founder, Proactive Talent