Radioshack Gaffe Show Need to Screen Current Employees

The recent admission by former RadioShack CEO David Edmondson that he inflated his educational credentials shows that it’s just as crucial for companies to screen current employees as it is for new hires.

Edmondson, who resigned last month, joined the Fort Worth, Texas, company in 1994 as vice president of mar­keting for the retail division of Tandy Corp., RadioShack’s predecessor company. The employer did a background check at the time of hiring, but did not check academic credentials.

The real mistake that RadioShack made was failing to do another background check on Edmondson before it promoted him to CEO, says Joseph McCool, senior contributing editor at ExecuNet, an online resource for recruiters. “Like many employers, RadioShack only incorporated the background check into its recruiting, but not its talent management process,” he says.

Over the past 10 years, an increasing number of employers have begun to conduct background checks before bringing employees on board. Ninety-six percent of human resources managers conduct background checks of some kind, up from 66 percent in 1996, according to the Society for Human Resource Management.

But very few employers do this on an ongoing basis with current employees, which means that even those companies that have started screening new hires may have a number of mid- and top-level managers who were never screened, attorneys say.

This is particularly an issue given that a recent survey conducted by ResumeDoctor.com, a résumé consulting company in Burlington, Vermont, indicates that 42.7 percent of résumés have significant inaccuracies.

“Companies, particularly those that are publicly traded, would be wise to do a thorough screening of employees before they are promoted to executive positions,” says Brad Fredericks, co-founder of ResumeDoctor.com.

Many employers are hesitant to screen current employees for fear of finding something wrong, says Garry Mathiason, an employment law attorney and the chair of the compliance and litigation group at Littler Mendelson in San Francisco.

“If you have an employee who has been doing a great job for the last 10 years and then you find they fibbed on their résumé, you have a dilemma,” he says. “On one hand the company may have a policy to terminate employees who lie on their résumés, but then again, you don’t want to lose 50 percent of your top performers.”

Also, employers resist screening current employees for fear of affecting employee morale, says Mike Sullivan, a principal at the law firm of Goldberg Kohn Bell Black Rosenbloom & Moritz in Chicago. “They don’t want to seem like Big Brother,” he says.

At the very least, public companies should be able to show that they do screen employees before promoting them to top positions, Sullivan says. “What frustrates shareholders most is if it looks like the company dropped the ball,” he says.

RadioShack seems to have taken that message to heart. On its corporate Web site, this note appears when a user clicks on a corporate biography link: “We are currently updating and validating all of the biographical information for each of our senior executives. Please check back soon to receive this information.”

—Jessica Marquez