Raising Cane’s Co-CEO and COO AJ Kumaran joins the Yahoo Finance Live panel to discuss how the restaurant chain is overcoming the U.S. labor crunch.
SEANA SMITH: The fast food chain Raising Cane’s is really doing all it can to address the labor shortage. Now the company has been moving some of its corporate workers to the restaurant. Some of them are filling in as cooks. Some of them are filling in as cashiers in order to help address the shortage that the company is seeing in the workforce.
So for more on this, we want to bring in AJ Kumaran. He is Raising Cane’s co-CEO and COO. AJ, it’s good to see you again. Last time you were on, we were talking about– we mentioned the fact that your company was facing a labor shortage. So now you’re moving some of your corporate workforce into the restaurant. Just give us a sense of how tough it is right now to find workers.
AJ KUMARAN: Good to talk to you, Seana. That’s right. You know, in fact, I am the co-CEO, the COO, fry cook, and cashier. And that’s every one of us in our business. So everyone, whether they’re working in the restaurant support office or in the field or serving in the front lines, they all go through the training to be a fry cook and a cashier. So, you know, times like this, we need all hands on deck and do all we can to support each other. This is that time.
So, we have over 200 of our support office crew members here in the Dallas office and about 250 of the support crew members who are in the field already. They’re all focused on one thing. That is finding, hiring, and onboarding the best of the best crew members into our system. So we have put a little bit of challenge for ourselves. We are about 40,000 crew members strong today. We want to get to 50,000 crew members in 50 days.
So 50-50, that’s our goal. It’s been fun times. It’s been pretty exciting. We’re doing anything and everything that it takes to support each other to get through these times.
ADAM SHAPIRO: AJ, I got to say, we love your energy. But many of us, when we’re teenagers, worked in restaurants. And the worst job anyone could have– I realize you’re in the fryer right now– emptying that frying grease. You can’t get that smell off your hands. It’s– so, good luck to you, my friend. Lots of lemon juice seems to help.
But when you talk about going from 40,000 to 50,000, I got to ask you. We’re going to get the labor numbers tomorrow. You grew during the pandemic. How do you sustain it? Because there is a labor shortage. How do you get people to come work?
AJ KUMARAN: You know, honestly, Adam, it begins with being one of the best places to work in the country. For four years in a row, Glassdoor recognized us through our employees voting. We are one of the best places to work in the country across all industries, you know?
And we are one of the very few handful of restaurant companies on that list in the top 100. That’s where it starts. Our culture is rooted in appreciation. So this is the way we are showing appreciation to each other today, is by lending a hand. You said smelling the fryer oil, but you’ve got to love that chicken, you know? So, we love it.
During the pandemic, we were able to attract and retain our great crew members simply because we said right out of the gates, no crew left behind. We’re going to make through this together. And we stood with each other. No one took a pay cut. No one gave up their jobs. We got through it. And through that time, we just didn’t survive. We thrived. We built a pipeline. We’re about to open over 100 restaurants in 10 new markets and five flagship locations all within the next six or nine months.
So, exciting times. So we need more crew members and join in on our journey. So that is what we’re doing today. These 10,000 additional crew members is going to help us do that. So it’s going to be fun.
SEANA SMITH: So, AJ, you haven’t had to raise– or you haven’t raised your wages at all or anything like that in order to entice people to come to work for you?
AJ KUMARAN: Absolutely. You know, Seana, these are tough times. Supply chain is a mess. You know, chicken prices are through the roof. You see these reports. And they just have gone up substantially. We invested over $25 million in wages beginning of this year on top of the $17 million that we did in thank you bonuses. And then on top of that, this week, we’re adding another $30 million into wages analyzed. And an extra $30 million will go into play in about two or three weeks.
So, add those numbers up. It’s roughly $85 million in annualized wages on top of the $17 million in thank you bonuses that we’re adding into wages this year. There is no question wages are going up across the country, and we want to be one of the best places to work, but also very competitive in the wages that we pay.
ADAM SHAPIRO: In my defense, we were frying clams at Denton’s Diner in Old Orchard Beach, Maine, so I bet the chicken smells a lot better. What advice would you have? Because you were a, as I pointed out, able to grow during the pandemic. You’re dealing and confronting the supply chain issues. But what advice would you have for small business owners? You know, the way you treat your employees, you don’t make people work on holidays, that kind of stuff. What else would you advise them to keep the staff happy?
AJ KUMARAN: You know, we believe in sharing in our success and also sharing in our story. We don’t hide anything from our crew members, be it the one that is sitting in the support office here in Dallas or the ones that are in the front lines. We share the same stories. You know, small businesses, Adam, they operate on razor thin margins. It’s very, very hard, no questions about it.
So, for instance, when this challenge around getting through a tough labor market came up, I talked to everybody about it. It was an overwhelming amount of people who reached out to me, blowing up my cell phone, saying, what can we do to support? Many of the news coverage out there calls it deploying people. We didn’t deploy anybody. People jumped in, and they wanted to help. And that’s what they wanted to do.
So my advice, to answer your question, would be sharing your success, sharing your stories, and also share the challenges with the crew. And they will join in the journey. And the best way to make it through anything is by bringing together, you know? That’s what we have found, and that’s what we practice every day.
SEANA SMITH: AJ, I know you were saying that your sales have really gone through the roof, even since the start of the pandemic. Just give us a sense of the consumer spending trends and I guess, how much people are spending now compared to what they were in the middle of the pandemic and pre-pandemic.
AJ KUMARAN: You know, so we were one of the few places with the drive-through business. So it was, we had that avenue where we could serve our customers safely through our drive-thru windows. So through the pandemic, we saw a decline in the initial stages for about first four weeks. Sales picked up nicely after that, as other small businesses, businesses with just dining rooms suddenly had to shut down. We saw about anywhere between 20% and 30% improvement. We are seeing that trend kind of stick on strongly all through this year right now.
In fact, Seana, we have had to shut down our drive-thru channels in about 100 restaurants, shut down our mobile channels in about 30 or 40 of our restaurants, just to make sure that our crew members can tackle the demand that you’re seeing. It is incredible demand. But it’s very hard to staff. And supply chain is tough. What do you say? It’s tough being a restaurateur these days.
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