“We need everyone on the bridge”

Raising Cane’s co-CEO and COO AJ Kumaran joins the Yahoo Finance Live panel to discuss how the restaurant chain is overcoming the labor shortage in the United States.

Video transcript

SEANA SMITH: Fast food chain Raising Cane’s is really doing everything it can to alleviate the labor shortage. Now the company has moved some of its employees to the restaurant. Some of them replace the cooks. Some of them are replacing the cashiers in order to help alleviate the shortage the company is seeing in the workforce.

So, to find out more, we want to call on AJ Kumaran. He is Raising Cane’s co-CEO and COO. AJ, it’s good to see you again. Last time you were there we were talking about … we mentioned that your business was facing a labor shortage. So now you move some of your workforce around the restaurant. Just give us an idea of ​​how difficult it is to find workers today.

AJ KUMARAN: Nice to talk to you, Seana. That’s right. You know, actually, I’m the co-CEO, the COO, the French fries cook and the cashier. And that’s all of us in our business. So everyone, whether they work in the restaurant support office or in the field or serve on the front line, everyone is trained to become a French fries cook and cashier. So, you know, in times like this, we need everyone on deck and do whatever we can to support each other. This is the moment.

So we have over 200 team members from our support office here in the Dallas office and around 250 support team members who are already in the field. They are all focused on one thing. It’s about finding, hiring and onboarding the best of the best crew members into our system. So we set ourselves a little challenge. Today we are about 40,000 crew members. We want to reach 50,000 crew members in 50 days.

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So 50-50 is our goal. It was a fun time. It has been quite exciting. We are doing whatever it takes to support each other and get through these times.

ADAM SHAPIRO: AJ, I must say, we love your energy. But many of us as teenagers worked in restaurants. And the worst job you could have … I know you’re in the deep fryer right now … draining that frying fat. You cannot remove this smell from 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 have to ask you. We will have the workforce figures tomorrow. You grew up during the pandemic. How do you maintain it? Because there is a labor shortage. How do you get people to come to work?

AJ KUMARAN: You know, honestly, Adam, it starts out as one of the best places to work in the country. For four years in a row, Glassdoor has recognized us through the votes of our employees. We’re one of the best places to work in the country across all industries, you know?

And we’re one of the few restaurant companies on that top 100 list. That’s where it all starts. Our culture is rooted in appreciation. So that’s how we show our appreciation for each other today, is by giving each other a helping hand. You said you smelled like frying oil, but you must like this chicken, you know? So we love it.

During the pandemic, we were able to attract and retain our excellent crew members simply because we said up front that no crew was left behind. We’re gonna go through this together. And we stood with each other. No one has suffered a pay cut. No one gave up their job. We got away with it. And during that time, we just didn’t survive. We have prospered. We have built a pipeline. We’re set to open over 100 restaurants in 10 new markets and five flagship locations, all within the next six or nine months.

So, exciting moments. So we need more crew members and to participate in our trip. So that’s what we’re doing today. These 10,000 additional crew members will help us do that. So it’s gonna be fun.

SEANA SMITH: So, AJ, you didn’t have to raise – or did you not increase your wages at all or something like that in order to get people to come and work for you?

AJ KUMARAN: Absoutely. You know, Seana, these are tough times. The supply chain is a mess. You know, chicken prices are skyrocketing. You see these reports. And they have just increased considerably. We invested over $ 25 million in salaries earlier this year on top of the $ 17 million we paid in thank you bonuses. And on top of that, this week we’re adding an additional $ 30 million to the salaries analyzed. And another $ 30 million will come into play in about two or three weeks.

So add up those numbers. That’s about $ 85 million in annualized salaries on top of the $ 17 million in thank you bonuses we’re adding to salaries this year. There is no doubt that wages are increasing across the country, and we want to be one of the best places to work, but also very competitive in the wages 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, as I pointed out, able to grow during the pandemic. You deal with and deal with 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 sort of thing. What else would you recommend to them to satisfy the staff?

AJ KUMARAN: You know, we believe in sharing our success and also sharing our story. We don’t hide anything from our crew, whether it’s the one sitting in the support office here in Dallas or those on the front lines. We share the same stories. You know, small businesses, Adam, operate on very thin margins. It’s very, very hard, no questions about that.

So, for example, when this challenge of overcoming a tough job market arose, I told everyone about it. It was an overwhelming number of people who contacted me, blowing up my cell phone, saying what can we do to support? Much of the media coverage calls it the deployment of people. We haven’t deployed anyone. People rushed in and wanted to help. And that’s what they wanted to do.

So my advice, to answer your question, would be to share your success, share your stories, and also share the challenges with the crew. And they will join the journey. And the best way to get through anything is to come together, you know? This is what we have found, and this is what we practice every day.

SEANA SMITH: AJ, I know you were saying your sales have really exploded, even since the start of the pandemic. Just give us an idea of ​​trends in consumer spending and I guess how much people are spending now compared to what they were in the middle of the pandemic and before the pandemic.

AJ KUMARAN: You know, so we were one of the few places with the drive-thru. So that was the case, we had this avenue where we could safely serve our customers through our drive-thru windows. So during the pandemic, we saw a drop in the initial stages for about the first four weeks. Sales picked up well after that, as other small businesses, businesses with only dining rooms suddenly had to shut down. We have seen about 20-30% improvement. We are seeing this trend hold strong throughout this year right now.

In fact, Seana, we’ve had to shut down our drive-thru channels at about 100 restaurants, shut down our mobile channels at about 30 or 40 of our restaurants, just to make sure our crew can meet the demand you ‘ review. It is an incredible request. But it’s very difficult to hire. And the supply chain is difficult. What are you saying? It’s hard to be a restaurateur these days.