Winning the Future Workforce: Retaining Generation Z in the Hospitality Industry

Introduction

Having spent over 20 years in the hospitality industry, I have come to realise that recruitment is no longer the biggest challenge, retention is.

This is especially true when it comes to Generation Z employees. Compared to earlier generations, their expectations are quite different. Stability alone is no longer enough. They seek growth, flexibility, recognition and a sense of purpose in their work.

In hospitality, this creates a clear tension. The industry is built on long hours, operational pressure, and service standards that cannot be compromised. At the same time, employees are expecting a more balanced and meaningful work experience.

This blog reflects on this gap by connecting practical experience with HRM theories and recent discussions on workforce trends.

Understanding Gen Z Through HR Theory

Many of the challenges we face today can still be explained using traditional HR theories, but their application is changing with the new workforce.

Herzberg’s Two Factor Theory suggests that employee satisfaction is influenced not only by working conditions but also by motivators such as recognition and personal growth (Herzberg, 1959). In hospitality settings, the focus is often placed on operational factors like shifts and workload. However, from my experience, this alone is not enough to keep younger employees engaged.

Even small acts of recognition, such as acknowledging effort during peak service hours, can improve motivation. But when employees feel there is no growth or appreciation, disengagement happens quite quickly.

At the same time, more recent studies suggest that employee expectations are becoming more complex. For example, Marchington and Wilkinson (2020) highlight that modern HRM needs to balance operational demands with employee experience. In hospitality, this balance is difficult to achieve consistently due to the nature of the work.

The psychological contract is also important in understanding Gen Z behaviour. This refers to the unspoken expectations between an employer and employee(Rousseau, 1995). These days, social media and employer branding frequently form these expectations before a person ever joins the company.

From what I have observed, employees now come in with higher expectations regarding career growth and workplace culture. When these expectations are not met early, dissatisfaction builds quickly. This suggests that the psychological bond is becoming more fragile compared to previous generations.

A Changing Workforce in a Global Context

Globally, the hospitality industry has gone through major changes, particularly after COVID 19. Many employees left the industry, and attracting them back has been a challenge. At the same time, Generation Z is entering the workforce with different priorities.

The new generation are now entering the workforce with higher expectations and greater awareness. They are more willing to change jobs if they feel dissatisfied.

In the Sri Lankan context, this situation becomes more complex. Economic uncertainty increases the need for job stability, but younger employees still prioritise personal development and work life balance. This creates a contradiction between financial necessity and career expectations.

Another shift is the increasing importance of employer reputation. Employees now evaluate organizations through online platforms before applying. This means HR is no longer only an internal function but is closely linked to branding and organisational image.

Why Retaining Gen Z is Still a Challenge

Even though these changes are quite visible, many organizations still struggle with retention. One common issue is the gap between what is promised and what is actually experienced by employees.

For example, organisations commonly promote career advancement and excellent work culture during recruitment. But once employees join, the reality can be quite different. When this occurs, confidence is damaged, and workers leave quickly.

Another challenge is the nature of hospitality work itself. Long shifts, weekend duties, and physically demanding tasks are part of the job. These cannot always be avoided. But how they are managed makes a big difference. Fair scheduling and proper communication can reduce frustration to some extent.

From my observation, many younger employees see hospitality jobs as temporary. They do not always view it as a long term career. Because of this, organizations hesitate to invest in them, and employees leave before they can actually grow. It becomes a cycle that is hard to break. 

Reflecting on Practical HR Strategies

Based on what I have experienced, retention improves when organizations focus more on the employee experience rather than just operations.

Employer branding plays an important role here. It is not only about attracting new employees but also about how existing employees feel about the organization. When people feel proud of where they work, it reflects in their performance and willingness to stay.

A good example of this can be seen in Marriott International, which has consistently focused on employee experience through its “TakeCare” programme (Marriott International, 2025). The initiative focuses on employee well being, recognition, and career support. From what has been observed globally, this approach has helped Marriott maintain stronger employee engagement especially the new generation, while also maintaining retention compared to many competitors in the hospitality sector.

Career development is especially important for Generation Z. Structured training and clear career paths can improve engagement. Even small initiatives, such as cross department exposure, can have a noticeable impact.

Engagement is often misunderstood. It is not just about events or celebrations. It is more about whether employees feel heard. Regular feedback, open communication, and involving employees in small decisions can create a stronger sense of belonging.

Work life balance is still difficult in hospitality, but small steps help. Fair shift planning and occasional flexibility can reduce burnout. Even simple things like listening to employee concerns can improve satisfaction.

One thing that stands out with Gen Z is their need for purpose. They want to feel that their work has meaning. Organizations that are involved in community activities or sustainability efforts tend to attract and retain such employees more effectively.

Conclusion

A change in perspective is necessary to keep Generation Z in the hospitality industry. Traditional approaches that focus on operations are no longer enough.

HR theories such as Herzberg’s model and the psychological contract still provide useful insights. But their application must be modified and adapted to match the industry's reality. 

From my experience, there is no single solution. Retention depends on consistent effort in creating an environment where employees feel valued and supported.

In an industry built around people, this becomes critical. Organizations that recognise this will be better positioned to build a stable and committed workforce in the future.

 References

Herzberg, F. (1959) The Motivation to Work. New York: John Wiley and Sons.

Marchington, M. and Wilkinson, A. (2020) Human Resource Management at Work. 7th edn. London: CIPD.

Rousseau, D. M. (1995) Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks: Sage Publications.

Marriott International (2025) Marriott Global Mental Health Strategy World Mental Health Day. Available at:world-mental-health-day-rachel