‘We haven’t got people’: Harvey Norman boss says labour shortages must be solved

Harvey Norman chairman Gerry Harvey says solving labour shortages should be top priority at the government’s skills and jobs summit this week, with a lack of staff the main challenge for many businesses.

“In my lifetime, I haven’t seen such a shortage of labour,” Harvey said when discussing the company’s 2022 financial results on Wednesday.

“You just need people, and we haven’t got people.”

Gerry Harvey expects Harvey Norman stores will benefit from pandemic-inspired construction and renovation activity.Credit: Janie Barrett

He said staff shortages were being felt right across the economy, from retail to hospitality, and that the country needed a plan to bring in workers from overseas across a range of industries.

Harvey will not be attending the federal government’s jobs summit this week but said “they should talk about nothing except that [labour shortages]” at the event.

On Wednesday, the Australian Retailers Association made a push to get more teenagers into jobs by establishing consistent age rules across the states for when young people can start work.

Association chief Paul Zahra suggested a model where 13 to 15-year-olds would be able to join the workforce with “sensible restrictions in place”.

Harvey said there were great benefits for teens who took up roles in retail.

“I think it’s probably one of the greatest educational things you can do — to have your kids work in retail for a minimum of a year,” he said.

“Because it’s like a wonderful course, they are learning to talk to people and engage with people.”

Harvey Norman reported a 3.6 per cent drop in net profit after tax for 2022, hitting $811.5 million. Earnings before interest, tax, depreciation and amortisation were 1.4 per cent lower at $1.44 billion.

‘In my lifetime, I haven’t seen such a shortage of labour. You just need people, and we haven’t got people.’

Gerry Harvey

While lockdowns hit the company’s local franchisees hard, stores have been able to embrace “pandemic-inspired construction and renovation activity”, Harvey and chief executive Katie Page said in a letter to shareholders.

“Household savings remain at record highs, growing by over $286 billion or 30 per cent since the start of the pandemic, primarily skewed towards higher-income households,” they said.

“Franchisees are well-placed to benefit from any unwind in the built-up household savings as they predominantly service the middle-to-upper product markets, and are expected to benefit from the sustained investment in the home as devices and appliances require replacement and upgrade.”

Harvey said the strength of the jobs market and solid consumer spending, particularly in regional areas, sat at odds with warnings about a slowdown or possible recession.

“When you’re talking to people, you think, gee, we must be in the biggest boom Australia has seen in the last 60 years,” he said.

Figures for the first two months of the new financial year show the retailer’s Australian sales are up by 10.7 per cent compared with last year, with comparable sales growth of 10.3 per cent.

Sales are up 5 per cent overall in New Zealand, but down by 1 per cent in Ireland and 10.2 per cent in the company’s Northern Ireland stores.

“The start of [financial year 2023] has seen solid sales results. Low unemployment and high net deposit rates continue to underpin growth,” the company said.

Investors will receive a fully franked final dividend of 17.5¢ a share, payable on November 11. The total full-year payout is 37.5¢, up from 35¢ in 2021.

Jarden analysts said the result was strong, but questioned whether it was enough to pull the stock higher given other retailers had delivered stronger results.

“Overall, looks like a good set of numbers with most divisions in line [or a] touch ahead,” the Jarden team said in a note to clients.

Harvey Norman’s shares declined throughout the day, opening 0.4 per cent lower and sitting down by close to 2 per cent to $4.24 just after 2:30pm AEST on Wednesday.

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