This cafe chain owner who pays $15 an hour says his commitment to treating staff fairly helped him avoid the labor shortage

• The Bluestone Lane cafe chain owner said he's largely dodged the effects of the US labor shortage.
• He's been paying employees $15 an hour nationally and has hired 400 employees since the pandemic.
• He said his success can partly be attributed to paying competitive and fair wages.
• See more stories on Insider's business page.

A dire labor shortage has left many business owners across the US struggling to find workers. But not the CEO of Bluestone Lane, a cafe chain with branches across the country, who has made hundreds of hires in the last eight months.

Nick Stone told Insider that he hasn't experienced many issues bringing back team members and hiring new ones for the chain's 51 locations. He said he recruited 400 new employees since February 2021.

The US labor shortage has hit all corners of the economy, including hospitality and more recently, trash pick-ups. It's caused some businesses to shorten opening hours, cut production, and raise prices.

Bluestone Lane, however, has not been particularly impacted by it, according to Stone. "Offering a competitive, and frankly a fair, hourly wage to our employees helps attract talent and improve retention, which has a direct positive correlation with business performance," he said.

Stone pays his employees $15 an hour nationally and $22 an hour to those living in New York.

His success story is similar to that of Michael Lastoria, CEO of restaurant chain &pizza. Lastoria told Insider that business was booming at the pizza chain's 51 locations and all were fully staffed. He said that the secret was paying staff a proper wage.

Employees working at Bluestone Lane are entitled to benefits such as a company-paid top-up mechanism to guarantee a certain amount of tips per hour, Stone said.

Like most of the hospitality industry as a whole, Stone said his chain was initially hit hard by the pandemic but quickly adjusted to the new reality. "We were able to keep 14 of our 52 locations operating across New York, Los Angeles and Washington DC," he said.

Part of its successful recovery can also be attributed to the cafe chain's digital ordering facilities. In July 2021, Stone said that Bluestone Lane became the first restaurant chain to offer dine-in ordering, takeout, and free delivery all through its proprietary app.

The app also provides customers with loyalty program rewards and special offers.

"We were ahead of the curve with the right technology and the right time, while our competitors were scrambling to adapt to the wave of customer demand for digital ordering," Stone said.

The cafe chain is popular among millennials and Gen Zers - who amount to 90% of its customer base - due to its healthier menu options and Australian-beach inspired interior, according to Stone.

That demographic are often digital natives, so adjusting to digital payments was a natural process for Bluestone Lane.

Stone said: "Our customers have embraced contactless ordering because it removes the friction, provides greater transparency on our menu and rewards our locals whether dining-in or ordering-ahead for takeaway."

The pandemic caused Stone to invest more heavily into urban and suburban residential areas, which also added to the coffee chain's success.

"Business and office districts are still subdued in most part of the country, with many people continuing to work from home. Our cafes in particular act as a retreat for those locals working from home who want a break," he said.

And despite new challenges brought on by the pandemic, Stone said the company continues to innovate, grow, and launch new products.