The Cardboard Box Company sees unpredictable short-term future with government changes

A firm in Lancashire, which provides ongoing support to numerous local charities, says a ‘perfect storm’ of government changes and a deflationary market has left it pausing recruitment and facing a significant increase in costs.

 The Cardboard Box Company says it’s taking a risk averse outlook this year to protect jobs, as the increase in National Insurance contributions (NICs), rise in the minimum wage and changing client budgets make the short-term future uncertain.

However, the Clayton-le-Moors business continues to be profitable and fulfil its promise to pay above the minimum wage, employ local people, invest in employee wellbeing and support charitable causes including the Accrington Stanley Foundation, Blackburn and Darwen Youth Zone, and East Lancashire Hospice.

Daniel Johnson, managing director at the firm, said: “Tackling the impact of increased costs is an ongoing challenge, one we face while putting our employees first at every turn.

 “Fortunately, we’re in a much better position to many businesses in that we’ve been able to plan for such times to ensure that we navigate these changes relatively smoothly.

 “The changes to National Insurance contributions mean we must increase our sales by more than £1m just to cover it. 

 “That is not an easy task in a market which is deflationary, as clients now value a service relationship much less and often go with the cheapest cost, which can sometimes mean unscrupulous competitors enter the market.

 “We can’t pass these extra costs on to clients because we would lose business, so we’re pausing recruitment and making sure we are focussing on achieving organisational efficiencies to protect jobs. All this is done whilst ensuring that any funds we have are going to make sure our employees are well looked after at the same time. 

 “Work should be an engaged and safe space for people and that’s why we invest in them and their wellbeing, including paying above the minimum wage – something which we’ll continue to do.

 “To safeguard our employees during these challenging times, we turned to another Lancashire/north west firm, employment law and HR specialists at AfterAthena, who helped us implement operational changes in a legally compliant and fair way.

 “This enabled us to remove the risk of redundancies through a reorganisation and reduce absences, as well as improving attrition rates within the business, all of which ultimately saved money to offset some of the burden from the NIC increase whilst also protecting our employees. 

 “And it’s this approach which will help us overcome many, if not all of the challenges we face.”

 The company employs almost 140 people, with 95 per cent from the local area. Many walk to work, giving the firm a family feel and meaning it plays an integral part in the local community.

 It is also facing an additional cost with the new extended producer responsibility, a tax which is enacted for any products that are being used directly for home delivery.

 Oli McCann, employment law and HR partner at AfterAthena, said: “As with many businesses, Daniel and the team at Cardboard Box Company are having to navigate increased costs and a turbulent market.

“It’s a testament to them that they’ve put their employees first, looking after their welfare and ensuring they are paid well above the minimum wage and market norms whilst finding other efficiencies and savings to lessen the burden.

 “As many businesses face these new challenges and increased costs, they can at least take solace in the Cardboard Box Company’s approach that ensures employees are looked after, and perhaps following it’s model for a longer-term future.”

 Daniel added: “Partnering with AfterAthena has been a game-changer for Cardboard Box Company.

 “Their expert advice has ensured we are fully compliant with all current legislation.

 “In particular, their support in rolling out our absence management policy has seen absenteeism fall to an all-time low.

 “Meanwhile, the training offered to management, particularly on return to work interviews, has helped us reduce presenteeism and has given the whole company a boost as we continue through the short-term uncertainty.”