Unpacking the Harvey Norman story


After keeping millions in JobKeeper payments, publicly opposing an increase to workers’ wages and going rogue on Twitter, can Harvey Norman recover public trust?

UPDATE : (07.09.21 ) Harvey Norman paid back $6 million in JobKeeper wages in August 20201. You can read more here.

This article mentions suicide. If you, or someone you know, requires assistance you can call Lifeline for crisis support on 13 11 14.

Harvey Norman workers and their supporters took to the streets in protest last week after the retail giant opposed workers’ calls for higher wages. The vitriol also flowed online, with the hashtag #boycottHarveyNorman trending earlier this week.

But that’s not all that people are upset about. Here’s a quick recap. The outrage from certain members of the public was first sparked in February when Harvey Norman’s co-founder, Gerry Harvey, refused to pay back around $22 million he collected in JobKeeper payments despite seeing solid financial growth during the pandemic – its net profits rose by 116 per cent in the latter half of 2020 (sitting at $462 million), according to various reports

Harvey was also slammed for referring to the pandemic as “the greatest boom I’ve seen in my lifetime” – as we now know, sales in home-related items skyrocketed as some consumers soothed their COVID-19 anxiety by making home improvements.

At the time, Labor frontbencher Andrew Leigh said, “At a time in which one million Aussies are out of work, taxpayers shouldn’t be supporting a billionaire. Time to pay it back, Gerry.”

Many other large companies that ended up turning a profit during the pandemic paid the JobKeeper money back – Dominos, Nick Scali, Toyota, Super Retail Group, just to name a few – but Harvey, who is also chair of Domayne and Joyce Mayne, refused to buckle under public and government pressure.

That was the first thing to cause upset. The second was the company’s public refusal to support its workers’ requests for a 3.5 per cent increase to minimum wages. Knowing the company raked in hundreds of millions of dollars, and the fact that Harvey personally benefited to the tune of $78 million as a major shareholder, likely only made matters worse.

“This is a great case study in how not to handle a crisis,” says Dani Lombard, crisis communications expert and PR specialist.

“What started as a flurry of negative media attention has now turned into a social media crisis, which has spurred further negative press and a groundswell of staff and public rage. The story was pretty awful to begin with, but its handling of it went from bad to worse.”

Twitter storm

The most recent issue was the company’s handling of the commentary about the protests and one former employee’s public claims via Twitter that working at Harvey Norman drove them to thoughts of suicide. In response, the company tweeted a ‘face-palm’🤦‍♀️ and ‘waving goodbye’ emoji 👋. 

“In the current climate where sensitivity towards the seriousness around mental health issues is at an all-time high (and rightly so), this response is nothing short of diabolical,” says Lombard. 

“It’s essentially sending the message that Harvey Norman doesn’t care about the mental health of its employees, or their wellbeing,” says Lombard. “It’s a massive black mark against their brand.”

Commentary around this tweet, and a range of others around the wage protests, resulted in a swathe of people getting blocked by Harvey Norman on social media, including social media influencer Celeste Barber, who shared the information with her 8 million Instagram followers, sparking even more calls to boycott the store.

There have been some reports that the Twitter activity could be due to the account being hacked as a day prior to the post the Twitter handle changed to read that the account was “no longer a customer service channel and is unmanned” and the Twitter account no longer exists.

Lombard says even if this were the case, the company should have spoken out to condemn the Twitter response by now. HRM reached out to Harvey Norman for comment but had not received a response at the time of publishing.

“It adds fuel to the fire because you’re taking away the public’s right to tell you how they feel,” says Lombard. Social media is a two way street. It’s not just a place for a company to talk to its customers, it’s a place for its customers to talk back – whether or not you like what they’re saying. 

“It would have made sense to issue a statement broadly stating ‘We see you, we hear you, but we won’t be responding individually’ [alongside] a carefully worded statement. But not letting people have their say is censorship and it’s a very, very bad strategy.”

What could Harvey Norman have done?

The only real way to recover from this is to have a comprehensive crisis management plan in place, says Lombard.

“[This should include] holding statements, a strategy to immediately review all marketing avenues – especially social media – and a team of senior people who can be pulled into a room together quickly to work out what happens next, on a minute-by-minute basis. It doesn’t seem like any of this was in place, or if it was, it certainly wasn’t executed appropriately.”

To avoid getting in hot water yourself, Lombard says companies should always review their social media policies and include details about who can and can’t respond to public comments as well as outline steps to take to quickly respond to potentially contentious issues.

“Everyone needs to know what their job is and how quickly they need to do it.”

However, Lombard says that the best defence against a trial by the media and general public is your people.

“If they’ve invested in their company culture… their staff would be coming out to bat for them, talking about how much they love working there and how great the company is.”

Is there any coming back from this?

All hope is not lost, says Lombard. If the company returned the JobKeeper money, made a statement about disciplining the person involved in the offensive tweets and reviewed and changed its social media policies, it could slowly rebuild public trust.

“In an ideal world, at this point they’d make a big donation to supporting a mental health charity to show how important this issue is to them. They’d review their staff wellbeing policies and programs and reinvest in them, review their corporate communications strategies and company culture, and treat all of these things with the urgency they demand.”

Consumers and employees expect more from big businesses these days, so taking steps to mitigate the damage caused by public scandals such as this are business critical.

“From things such as the MeToo movement to wage underpayment scandals, companies are being held accountable – whether that’s in a court of law or the court of public opinion. The current media landscape means every company is laid bare to this public scrutiny. It’s no longer just the media you need to appease, it’s every single member of the public armed with a keyboard and a mobile phone.”

This article has been updated since it was first published on 8th of June, 2021.

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Robert Compton
Robert Compton
3 months ago

Do the employees actually work for Harvey Norman of the small business owners to whom he rents space on his stores? This is the first question to be investigated

Ryan
Ryan
3 months ago

“It’s astonishing to believe that companies think they can get away with behaving like this in 2021. There is almost always a groundswell of public outrage when organisations behave badly these days.” Because they CAN get away with it. They ARE getting away with it. Harvey Norman has been behaving like this for decades. From demanding the government put GST on internet purchases to his constant self-depiction as the “local Aussie business” whilst screwing over local Aussies, this guy has been tone deaf and antipathetic for many years, yet still making huge profits. It’s the perfect example of a cold… Read more »

John Girardi
John Girardi
3 months ago

Wow! This is quite a political article. Basically, HRM has taken a stand against Harvey Norman. I feel like I’ve just read a piece written by the ACTU. Maybe all HR practitioners should boycott Harvey Norman?

Cecilia Jones
Cecilia Jones
3 months ago

This is a brilliant case study in poor leadership, unethical practices, bigotry, cynicism and an appalling culture- a PhD in what not to do as a leader of franchises. Ultimately, Gerry Harvey is setting the scene here but I’m very suspicious that he doesn’t care that much. I guess he’ll start caring when it effects profits. While the article points to what Harvey Norman should do from a marketing perspective, it has to really mean it, that is it has to be sincere in anything it does and not pay lip service for marketing reasons. So, paying back job keeper,… Read more »

Pat
Pat
1 month ago

Does that mean that Harvey Norman has set a precedent re paying back Overpayment money to Gov, ie if Centrelink clients receive an overpayment can keep the money.

More on HRM

Unpacking the Harvey Norman story


After keeping millions in JobKeeper payments, publicly opposing an increase to workers’ wages and going rogue on Twitter, can Harvey Norman recover public trust?

UPDATE : (07.09.21 ) Harvey Norman paid back $6 million in JobKeeper wages in August 20201. You can read more here.

This article mentions suicide. If you, or someone you know, requires assistance you can call Lifeline for crisis support on 13 11 14.

Harvey Norman workers and their supporters took to the streets in protest last week after the retail giant opposed workers’ calls for higher wages. The vitriol also flowed online, with the hashtag #boycottHarveyNorman trending earlier this week.

But that’s not all that people are upset about. Here’s a quick recap. The outrage from certain members of the public was first sparked in February when Harvey Norman’s co-founder, Gerry Harvey, refused to pay back around $22 million he collected in JobKeeper payments despite seeing solid financial growth during the pandemic – its net profits rose by 116 per cent in the latter half of 2020 (sitting at $462 million), according to various reports

Harvey was also slammed for referring to the pandemic as “the greatest boom I’ve seen in my lifetime” – as we now know, sales in home-related items skyrocketed as some consumers soothed their COVID-19 anxiety by making home improvements.

At the time, Labor frontbencher Andrew Leigh said, “At a time in which one million Aussies are out of work, taxpayers shouldn’t be supporting a billionaire. Time to pay it back, Gerry.”

Many other large companies that ended up turning a profit during the pandemic paid the JobKeeper money back – Dominos, Nick Scali, Toyota, Super Retail Group, just to name a few – but Harvey, who is also chair of Domayne and Joyce Mayne, refused to buckle under public and government pressure.

That was the first thing to cause upset. The second was the company’s public refusal to support its workers’ requests for a 3.5 per cent increase to minimum wages. Knowing the company raked in hundreds of millions of dollars, and the fact that Harvey personally benefited to the tune of $78 million as a major shareholder, likely only made matters worse.

“This is a great case study in how not to handle a crisis,” says Dani Lombard, crisis communications expert and PR specialist.

“What started as a flurry of negative media attention has now turned into a social media crisis, which has spurred further negative press and a groundswell of staff and public rage. The story was pretty awful to begin with, but its handling of it went from bad to worse.”

Twitter storm

The most recent issue was the company’s handling of the commentary about the protests and one former employee’s public claims via Twitter that working at Harvey Norman drove them to thoughts of suicide. In response, the company tweeted a ‘face-palm’🤦‍♀️ and ‘waving goodbye’ emoji 👋. 

“In the current climate where sensitivity towards the seriousness around mental health issues is at an all-time high (and rightly so), this response is nothing short of diabolical,” says Lombard. 

“It’s essentially sending the message that Harvey Norman doesn’t care about the mental health of its employees, or their wellbeing,” says Lombard. “It’s a massive black mark against their brand.”

Commentary around this tweet, and a range of others around the wage protests, resulted in a swathe of people getting blocked by Harvey Norman on social media, including social media influencer Celeste Barber, who shared the information with her 8 million Instagram followers, sparking even more calls to boycott the store.

There have been some reports that the Twitter activity could be due to the account being hacked as a day prior to the post the Twitter handle changed to read that the account was “no longer a customer service channel and is unmanned” and the Twitter account no longer exists.

Lombard says even if this were the case, the company should have spoken out to condemn the Twitter response by now. HRM reached out to Harvey Norman for comment but had not received a response at the time of publishing.

“It adds fuel to the fire because you’re taking away the public’s right to tell you how they feel,” says Lombard. Social media is a two way street. It’s not just a place for a company to talk to its customers, it’s a place for its customers to talk back – whether or not you like what they’re saying. 

“It would have made sense to issue a statement broadly stating ‘We see you, we hear you, but we won’t be responding individually’ [alongside] a carefully worded statement. But not letting people have their say is censorship and it’s a very, very bad strategy.”

What could Harvey Norman have done?

The only real way to recover from this is to have a comprehensive crisis management plan in place, says Lombard.

“[This should include] holding statements, a strategy to immediately review all marketing avenues – especially social media – and a team of senior people who can be pulled into a room together quickly to work out what happens next, on a minute-by-minute basis. It doesn’t seem like any of this was in place, or if it was, it certainly wasn’t executed appropriately.”

To avoid getting in hot water yourself, Lombard says companies should always review their social media policies and include details about who can and can’t respond to public comments as well as outline steps to take to quickly respond to potentially contentious issues.

“Everyone needs to know what their job is and how quickly they need to do it.”

However, Lombard says that the best defence against a trial by the media and general public is your people.

“If they’ve invested in their company culture… their staff would be coming out to bat for them, talking about how much they love working there and how great the company is.”

Is there any coming back from this?

All hope is not lost, says Lombard. If the company returned the JobKeeper money, made a statement about disciplining the person involved in the offensive tweets and reviewed and changed its social media policies, it could slowly rebuild public trust.

“In an ideal world, at this point they’d make a big donation to supporting a mental health charity to show how important this issue is to them. They’d review their staff wellbeing policies and programs and reinvest in them, review their corporate communications strategies and company culture, and treat all of these things with the urgency they demand.”

Consumers and employees expect more from big businesses these days, so taking steps to mitigate the damage caused by public scandals such as this are business critical.

“From things such as the MeToo movement to wage underpayment scandals, companies are being held accountable – whether that’s in a court of law or the court of public opinion. The current media landscape means every company is laid bare to this public scrutiny. It’s no longer just the media you need to appease, it’s every single member of the public armed with a keyboard and a mobile phone.”

This article has been updated since it was first published on 8th of June, 2021.

guest
11 Comments
Inline Feedbacks
View all comments
Robert Compton
Robert Compton
3 months ago

Do the employees actually work for Harvey Norman of the small business owners to whom he rents space on his stores? This is the first question to be investigated

Ryan
Ryan
3 months ago

“It’s astonishing to believe that companies think they can get away with behaving like this in 2021. There is almost always a groundswell of public outrage when organisations behave badly these days.” Because they CAN get away with it. They ARE getting away with it. Harvey Norman has been behaving like this for decades. From demanding the government put GST on internet purchases to his constant self-depiction as the “local Aussie business” whilst screwing over local Aussies, this guy has been tone deaf and antipathetic for many years, yet still making huge profits. It’s the perfect example of a cold… Read more »

John Girardi
John Girardi
3 months ago

Wow! This is quite a political article. Basically, HRM has taken a stand against Harvey Norman. I feel like I’ve just read a piece written by the ACTU. Maybe all HR practitioners should boycott Harvey Norman?

Cecilia Jones
Cecilia Jones
3 months ago

This is a brilliant case study in poor leadership, unethical practices, bigotry, cynicism and an appalling culture- a PhD in what not to do as a leader of franchises. Ultimately, Gerry Harvey is setting the scene here but I’m very suspicious that he doesn’t care that much. I guess he’ll start caring when it effects profits. While the article points to what Harvey Norman should do from a marketing perspective, it has to really mean it, that is it has to be sincere in anything it does and not pay lip service for marketing reasons. So, paying back job keeper,… Read more »

Pat
Pat
1 month ago

Does that mean that Harvey Norman has set a precedent re paying back Overpayment money to Gov, ie if Centrelink clients receive an overpayment can keep the money.

More on HRM