How CEOs and CFOs Can Lead the Way with Employee Integrity

We all know it: running a bar or restaurant is expensive enough without taking employee theft into account.

When you factor in the amounts of inventory loss across an entire nationwide chain, it can seem like an insurmountable problem for a CEO or CFO to tackle.

However, when it comes to employee integrity, the truth may be staring you right in the face:

Just like everything else in business, employee integrity is about systems that encourage excellence.

If you have issues with employee theft, you may have a systems-based problem on your hands.

Yes, theft is going to happen from time to time – but other chains have learned how to keep it to a minimum without breaking the bank, and you can too.

Encouraging Employee Integrity in a Nationwide Chain

1. Establish a Loss Prevention Baseline

You need to figure out where you stand – objectively and empirically. You need to know which locations are struggling the most with theft and loss prevention, which team members are leading the way in excellence, and where the biggest drains are in your income and inventory.

Many bars and restaurants hire an independent company to conduct a tailored bar audit program to evaluate these factors using mystery shoppers and other forms of data collection and analysis.

Don’t forget to include your pour costs in your baseline analysis. As a key standard of bar profitability, your pour cost trends over time can reveal theft and bartender accuracy challenges – which can add up to higher inventory costs and lower profit margins.

2. Assess Your Tools.

Your chain-wide systems and procedures, enforced by effective general managers, are your greatest asset in maintaining consistently high employee integrity standards. If your benchmarks are showing unacceptably low numbers compared to what you would like to see, run through this checklist of employee integrity systems your bar should have in place:

  • Do we have cameras in place? Are they positioned appropriately and reviewed on a schedule?
  • Do we have up-to-date POS register systems? What kinds of reports do they generate?
  • What systems am I using to monitor and reduce pour rates? When was the last time we evaluated our bartenders’ pouring and conducted trainings?
  • Are we using a mystery shopping program to monitor our bartenders for signs of theft or other dishonest behaviors? What questions are we asking?
  • What systems are we using to ensure compliance with industry best practices (such as checking identification of patrons to reduce incidents of serving minors)?
  • How tight are all of these systems from a security perspective?

3. Pursue Actionable Improvements.

Few employee integrity systems are completely airtight. After you review your current tools and systems, look at simple things to improve and tighten those systems.

Your goals should be to put a process in place that uses helpful monitoring activities on a steady basis to ensure consistency. Of course, the tools you use must also be appropriate to the manpower and money available to your business.

Ask your team:

  • What is working?
  • What can be tightened both simply and cost-effectively?
  • What can be easily added to the toolbox that won’t take too many resources?

4. Put Integrity On the Agenda

Be a leader in the area of employee integrity by adding it as a priority on your corporate agenda.

Take time in team meetings to start conversations around employee theft, pilferage and misconduct. Listen to your general managers, employees on the ground, and others who can help you drive the effort forward in tangible ways. Encourage your teams to pursue mystery shopping programs and other avenues of on-the-ground research that can help your business get its loss prevention challenges under control nation-wide.

5. Make Changes and Measure Them

The danger with challenges like employee integrity is that companies can be tempted to spend more time talking than taking action. As a C-level leader, you can help your company overcome the hurdle of inaction by empowering your team to make changes and following up with requests for updates.

After you make changes to your process and systems on the ground, you need to measure them against the baseline you established back in Phase 1. Using the same measurement techniques, you can monitor the progress toward improved employee integrity in key operational areas.

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Employee theft and misconduct is going to happen. If you want to prevent it but don’t want to spend too much to do so, this systematic approach is a valuable way to make sure you are able to do so.

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