Poor Pub Culture – The Tip Of The Iceberg For Employee Fraud

Pub landlords, owners and managers – from large chains to single sites – need to work hard to engage differently with their teams, ensuring a highly engaged and motivated workforce. This is key to a positive working culture.

Earlier this year, Tenet’s founder, Arun Chauhan, spoke at the MA500’s event to share how the wrong pub culture can leave you at high risk of employee fraud.

Protecting your business

To effectively protect your business against the various challenges posed by dishonesty, you need to look beyond your policies and procedures. The key is to motivate your entire team through trust to build a positive culture. The risk of employee or insider fraud is well known – and publicans in particular are vulnerable in many ways. For example, stock pilferage, misrepresentation of hours or cash fraud.

To effectively act to reduce your pub’s risk, it’s time to take a different approach.

Culture and its influence

The culture of your pub is the atmosphere it creates for both your employees and customers. Your culture underpins everything you say, everything you do and everything others say about you. Ultimately, this determines the long-term success of your business.

Getting your culture right is crucial for any business – but for those in the hospitality sector, it’s more important than ever. If you have a poor culture, it will project from your frontline team – impacting on your customers’ experience in your pub. Ultimately, the quality of customer experience determines your turnover and profit – customers won’t want to part with money or time if they’re served by an unhappy team in an uncomfortable environment. As a result, if your culture isn’t right, your revenue and profits are likely to suffer.

Your pub’s culture is heavily influenced by your leadership. Your culture then determines the engagement, or disenchantment, of your team. If your leadership is creating a weak culture, employees will become less motivated and disenchanted – causing an increased fraud risk.

The recipe for engagement

Effective fraud protection is about ensuring your leaders truly understand their teams.

Your team are your pub’s front line – they’re the first point of contact for your customers and they give the lasting impression of your business. Ultimately, your team determines the experience your customers have. If your team aren’t happy, your customers won’t be happy either.

If your team feel trusted, they’ll look out for one another. They’ll feel engaged with your policies and feel confident enough to offer up solutions.

At any level, leaders have the ability to influence the pressure on, motivation and engagement of their team. As a result, leaders shouldn’t rely solely on policies and regulations to combat dishonest behaviour. Your policies are there to support your team – not drive their behaviour.

As a leader, ask yourself the following questions:

  • Do you understand the pressures facing your team? Are you helping to alleviate these? Eg by helping them out when the pub gets busy or handling complaints as they escalate. If you support your team, they’ll work harder to support your business.
  • Are your systems for rewards fair? If they’re rewarded for delivering higher standards of service, through tips for example your team will go above and beyond to achieve it. It’s crucial you’re not reducing this incentive. Ensure all tips are divided fairly between frontline team members as to reflect who earnt them.
  • When was the last time you thanked your team? On a busy night, a pub can be a very stressful environment for teams and tempers can flare. At the end of each shift, a thank you to your team will go a long way to show how much you value their efforts.

By nature, pubs are prone to high staff turnovers with part-time team members, student employees etc. This means you need a culture where people protect one another – one resilient to any team changes. All team members often have the same access to transactions, tills, tips, etc, so the risk of fraud is still, if not more, present.

Are you aware of the risks you’re facing?

A crucial part of reducing your fraud risk is understanding where you’re most vulnerable. Some of the key risks you might be facing include:

  • Pilferage – such as team members treating themselves to a pint at the end of a busy shift or a packet of crisps to stop them from getting hungry before the end of their shift
  • Transaction fraud – a poor culture also puts your customers at risk. For example, if team members only giving change for £10 when a customer gave £20 after they’ve had a few drinks and are less likely to notice
  • Float theft – taking money from the daily float – a small amount each shift might go unnoticed but over time, these add up
  • Tips – employees taking more than their share from the tips. This can dampen the morale of your entire team
  • Credit card fraud – as we’re becoming an increasingly cashless society, the risks aren’t decreasing – they’re simply changing.

Engaging differently with your team

Get feedback from your team. Ask them how they’re feeling or how things could be better – understanding their feelings is invaluable to improving your business’ culture.

Protection isn’t about monitoring your team 24/7. It’s about demonstrating trust and projecting this above mistrust. If your team feel trusted, they’ll trust you, reporting when things aren’t quite right.

The best method of protection is finding a balance between having the systems in place to detect fraud and demonstrating trust. There will always be the odd outlier, but if your culture is strong, the resulting customer loyalty will pay back your losses in spades.

Do you want to talk about improving your culture to reduce your risk of fraud? Get in touch, we’d love to help.

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