Challenges in Human Resource Management for Millennial and Generation Z Cohorts: Difficulties in Talent Recruitment and Retention—Application to the Tourism and Hospitality Sector

Abstract

This study explores how the unique characteristics of Generation Y/Millennials and Generation Z influence talent retention challenges in the hospitality sector and identifies Human Resource Management (HRM) strategies that effectively address these generational dynamics. The multigenerational workforce in this industry spans multiple cohorts, each with distinct work values and expectations, and these generational differences in work attitudes have compelled Human Resource (HR) departments to adopt a range of tailored recruitment and retention strategies. This qualitative research examines how hotel directors and HR managers in the city of Porto, Portugal perceive the recruitment challenges associated with younger generations and what strategies they use to overcome them. The findings highlight specific traits of Millennial and Generation Z employees, confirming that these cohorts present unique recruitment and retention challenges, and validate targeted response strategies to address those challenges. Overall, the study sheds light on sector-specific hurdles, multigenerational management issues, and effective HRM practices for attracting and retaining young employees (Generation Y/Millennials and Generation Z).

1. Introduction

The hospitality and tourism sector faces chronic challenges in recruiting and retaining employees, challenges that are amplified by the entry of two distinct younger cohorts—Generation Y/Millennials and Generation Z—into the workforce (Sun et al., 2022). While each of these generations has its own unique characteristics and formative experiences, both tend to be highly educated, technologically savvy, and more demanding of work–life balance than their predecessors. Such traits, common to many Generation Y/Millennials and Generation Z workers, have strained traditional HRM models (Seyfi et al., 2024). By distinguishing between Generation Y/Millennials and Z, this research provides a clearer understanding of multigenerational workforce dynamics and avoids conflating the cohorts, thereby laying a sound foundation for comparing them with older generations such as Gen X and Baby Boomers. Despite growing interest in generational dynamics in the workplace, there remains a notable gap in the literature specifically addressing the HRM challenges posed by Millennials and Generation Z within the hospitality and tourism sector. While some studies have explored generational differences in work values and expectations, few have examined how these differences translate into concrete recruitment and retention challenges in this industry, particularly within the Portuguese context.

For the purposes of this paper, ‘younger employees’ refers to those in the Millennial and Generation Z cohorts, and the term ‘talent’ denotes the skilled employees (in particular, members of these younger generations) that organizations aim to recruit and retain.

Turnover rates in hospitality are among the highest of any industry—for example, the annual employee turnover in hotels has been reported at over 70%, far above the cross-industry average. In Portugal’s hotel sector specifically, 75% of employees have less than 7 years of tenure (and 65% under 3 years), indicating rapid cycling of staff. This instability is closely tied to the workforce’s demographic makeup. As of 2019, about 60% of hospitality employees were under 40 (with 20% under 25). Industry associations have thus flagged a looming talent crisis (a shortage of skilled workers, particularly young entrants), noting a lack of qualified labor in the tourism sector and difficulty attracting young employees to persistent low-wage, irregular-hour jobs. These trends suggest that younger cohorts may be more difficult to recruit and retain, as they often have higher expectations for work–life balance and career progression. Global surveys support this notion—over half of Millennials and Generation Z respondents said they would leave their current job within two years if better opportunities arise, a propensity higher than that of Gen X or Boomers (Deloitte, 2019).

Given that Millennials (born ~1981–1996) and Generation Z (~1997–2012) now constitute most new entrants into the labour market, understanding how their distinct characteristics influence HRM practices is both timely and essential. This study responds to this need by investigating the specific recruitment and retention challenges faced by hospitality organizations in managing these cohorts, thereby addressing a critical gap in the existing literature. By qualitatively exploring the perspectives of hotel HR directors and managers, one aims to identify whether and how recruiting/retaining Millennials and Generation Z differs from past practices, and what strategies might mitigate the issue. The study was conducted within companies operating in Portugal’s hospitality and tourism sector.

The term generation refers to a group of individuals of similar age and/or with only minor age differences, who have lived through and experienced comparable social milestones that, in various ways, have shaped their personal and professional life trajectories (Sessa et al., 2007). Thus, the environment and inherent characteristics of the hospitality sector provide an opportunity to explore organizational issues, highlighting the strategic role of people management (Ružić, 2015), particularly within the Portuguese tourism and hospitality industries, where employees from multiple generations coexist.

To support sustainable tourism growth in Portugal, companies in the hospitality sector are developing effective strategies for talent recruitment and retention. However, numerous reports from industry leaders highlight persistent challenges regarding the hiring processes (AHRESP, 2018). Arjona-Fuentes et al. (2019) found that working conditions in the tourism sector require thorough examination, given the precarious nature of employment to which workers are often subjected, including seasonality, part-time contracts, low wages, and numerous overtime hours. Boz and Yilmaz (2017) argued that attracting and recruiting the best candidates represents a significant challenge for companies in the tourism, accommodation, and catering industries. Thus, it becomes crucial for companies operating in this sector to develop strategies that ensure their recruitment processes are both efficient and effective, enabling them to secure the best available employees in the labour market. To achieve this, it is important to identify recruitment sources to grab the intended target audience.

HRM has undergone a significant transformation, evolving from a predominantly administrative and operational function to a strategic discipline that plays a pivotal role in fostering organizational competitiveness and value creation. In the context of contemporary labour market dynamics, individuals are increasingly disinclined to delay career advancement in anticipation of optimal opportunities. Instead, they are more inclined to pursue alternative employment pathways that offer immediate prospects for professional growth and development (N. Costa et al., 2021).

People Management and employee well-being within organizations are increasingly becoming a priority for those responsible for these areas (Ariza-Montes et al., 2019). Organizations are formed with their employees and depend directly on them to operate and succeed in the markets in which they compete (Ferreira, 2006). Boella and Goss-Turner (2019) argued that HRM is responsible for all individuals within organizations who have people to manage, aiming to achieve two components: efficiency and fairness. The authors argued that organizations cannot achieve successful HRM without these two components. In this regard, managers should seek to establish and develop fair terms and conditions of employment and work for their teams and employees within their organizations. HRM must also maintain a dynamic and flexible stance, influencing employees to adopt more effective and efficient behaviors in response to changes in the labour market and within organizations. Organizations should invest in employees whose performance aligns with the company’s culture, environment, and client needs, thereby making staff a competitive advantage (Bentes et al., 2009).

The study by Baum and Hai (2019) on the employment outlook in the hospitality sector identified a culture characterized by high turnover and ongoing recruitment challenges. From the author’s perspective, special attention to these two aspects is necessary for organizations, emphasizing the importance of implementing talent management practices (cited by Goh & Okumus, 2020). The tourism job market shows instability in filling available vacancies, as evidenced by high worker turnover (M. D. I. Cunha, 2016; Ružić, 2015). According to Lee-Ross and Pryce (2010), employees are primarily young and receive 75% less than the entire industry average (cited by Ružić, 2015).

Although generational workforce differences have been studied, existing research has not sufficiently addressed the specific challenges of managing Millennials and Generation Z in the hospitality sector, especially in the Portuguese context. Thus, the present paper aims to achieve the following objectives:

• To identify the distinctive work-related characteristics and expectations of Millennials and Generation Z in the hospitality sector.
• To examine how these generational traits contribute to specific challenges in talent retention within hospitality organizations.
• To explore which HRM strategies are perceived as most effective in addressing these retention challenges and aligning with the values of younger cohorts.

Together, these objectives form a coherent framework for understanding how generational traits shape retention challenges and how HRM practices can be adapted to meet the expectations of younger employees. These objectives also contribute to the academic discourse by offering empirical insights into how hospitality organizations in Portugal (specifically in Porto City) are adapting their HRM strategies to better attract and retain Millennial and Generation Z employees. By distinguishing between these two cohorts and capturing the perspectives of HR professionals, the research provides a nuanced understanding of generational workforce management that has been underexplored in prior studies.

2. Theoretical Framework

Recruitment and selection constitute critical functions within organizational HRM, serving as foundational processes for securing talent aligned with strategic objectives. Recruitment encompasses a systematic set of practices aimed at identifying and attracting individuals with the requisite competencies and potential to fulfil organizational roles effectively (Wilkinson et al., 2010). However, the initiation of hiring should ideally stem from deliberate strategic workforce planning rather than reactive or ad hoc needs, as the latter may increase the risk of appointing candidates who are misaligned with organizational requirements (Mendes, 2015). Adopting a strategic approach to recruitment necessitates the integration of factors that are highly valued by prospective employees—such as competitive remuneration, favorable working conditions, geographic accessibility, opportunities for professional development, and clear career progression pathways—into the employer value proposition (Fernandes, 2017).

HRM must lead a strategic approach. The mission and objectives of the HR function have evolved in response to labour market dynamics, and the structures organizations have adopted. In a way, expectations have been created that define the role of human resource managers by both the tasks that arise and their essential role in supporting hierarchical leadership across the organization’s departments (Da Câmara et al., 2010). In this sense, organizations operate in an environment of constant uncertainty, where technologies, active competition, market openings and closures, and global financial, economic, social, and political turbulence have driven changes in the psychological contracts between organizations and individuals (M. P. Cunha et al., 2016).

The human resource practices implemented in the hospitality industry are considered underdeveloped compared to those in other labour market industries (Kusluvan et al., 2010). Solnet et al. (2013) argued that certain human resource practices are being downgraded or even eliminated. However, it is essential to understand that the hospitality sector is highly dependent on its workers, as they represent the company’s face and provide services to customers. The absence of quality service delivery prevents customers from providing positive feedback about the business. Supporting this idea, a study conducted by Enz (2009) applied to 243 managers in the hospitality sector concluded that there is a set of HRM issues that managers do not regard as concerns. This lack of concern among managers prevents many human resource measures and strategies from being implemented. In the same study, managers identified four main problems directly related to HRM: (i) attraction; (ii) retention; (iii) training; and (iv) motivation.

In the hospitality and tourism sector, HRM can be viewed as a cycle encompassing three fundamental phases—Attraction, Maintenance, and Workforce Development (Nickson, 2015). These phases correspond to the core HR functions of recruiting, retaining, and developing employees, which are relevant in any industry. However, what differentiates the hospitality context is how these phases must be executed under the sector’s unique conditions. Hospitality businesses often face intense seasonality, irregular (24/7) operating hours, and high employee turnover, which means HR managers cannot rely on a one-size-fits-all approach. Nickson (2015) argued that one “cannot develop a general strategy” underscores that hospitality firms must tailor their HR strategies to factors such as workforce demographics, union environments, and performance evaluation norms specific to their setting.

Pearlman and Schaffer (2013) highlight that HRD within tourism enterprises face fluctuating and prolonged working hours, primarily due to operational demands associated with roles such as waitstaff, culinary personnel, and front-desk staff, as well as large-scale recruitment driven by seasonal variations. Consequently, ensuring that selected candidates demonstrate both efficiency and organizational commitment becomes imperative (Ariza-Montes et al., 2019). Within this framework, Boz and Yilmaz (2017) argue that attracting and retaining top-tier talent constitutes a critical challenge for organizations operating in the hospitality and tourism sectors. The strategic significance of human resources in these organizations has grown markedly, as managers increasingly recognize their potential to deliver competitive advantage through superior service quality. This importance is further amplified by substantial labor costs and the escalating scarcity of skilled personnel in specific segments of the hospitality industry (Boella & Goss-Turner, 2019).

2.1. Recruitment Context

Recruitment is typically overseen by HRM departments and involves the strategic attraction of candidates for available organizational roles. In this capacity, recruitment functions as an information system that communicates employment opportunities to the external labour market (Chiavenato, 2020). As noted by Lievens and Chapman (2019), the effectiveness of an organization’s management is intrinsically linked to the quality of individuals it can attract and select. When recruitment processes successfully draw candidates with distinctive hard and soft skills, the subsequent selection of high-quality employees enhances organizational performance and contributes directly to the achievement of strategic objectives (cited in Junça, 2015).

The recruitment practices adopted by HRM within organizations should identify the most effective recruitment sources to attract the most qualified candidates (Wilkinson et al., 2010). However, to achieve these objectives, HRM may choose to pursue internal, external, or both. A strong recruitment process alone is not sufficient to overcome the challenge of high employee turnover. Organizations should address this issue by maintaining employment conditions and continuously updating them to align with evolving market conditions (Boella & Goss-Turner, 2019).

Prior to initiating any recruitment process, it is essential that the requesting party clearly defines the desired candidate profile, including the requisite qualifications, competencies, and associated responsibilities of the role. This preliminary step ensures alignment with the Human Resources Department (HRD), thereby guiding the subsequent curriculum analysis and selection procedures towards the intended profile (Da Câmara et al., 2010). Based on this information, the HRD is responsible for structuring and drafting the job announcement. During this planning phase, decisions are made regarding the communication strategy—specifically, the timing, channels, and language of dissemination—to ensure resonance with the target audience. For greater clarity, the recruitment process can be delineated into several key stages: identifying the organizational need, analyzing the job description, preparing the job announcement, selecting appropriate recruitment sources, and conducting curriculum screening.

In fact, recent reports confirm that hospitality employers continue to face serious difficulty recruiting new staff in the post-pandemic period (European Labour Authority, 2024; Jobs and Skills Australia, 2023). A study, carried out in 2016 by the Society for HRM in the United States of America, show that HR managers compete for top talent in a challenging market, facing shortages of applicants, a lack of qualified candidates, and intense competition from other organizations. The same study also concludes that 70% of the organizations use social networks as a recruitment asset, 58% collaborate with schools, and 49% seek new promotion strategies to attract human resources. These were the top three recruitment outcomes adopted by HR professionals in organizations.

Douro Azul, a company in Portugal’s hotel sector, holds an annual Open Day to attract students and qualified professionals for mass recruitment during peak hiring periods (Douro Azul, 2025). The Pestana Group, Portugal’s largest hotel group, promotes its job openings each year through an Open Day to prepare for the high season (Pestana Group, 2020). Digital channels are the primary sources of dissemination.

Organizations increasingly use digital channels to share and promote recruitment processes. These channels make communication quicker and easier, narrowing distances and speeding up recruitment processes. Boudlaie et al. (2019) stated that social networks are unsuitable for recruitment at all levels and positions, so digital campaigns must have targeted and specific goals. Ružić (2015) states that effective recruitment enhances employee loyalty. This requires understanding candidate motivations and clearly communicating job conditions—such as salary, hours, and work environment—during critical interactions.

2.2. Talent Retention Within the Tourism and Hospitality Industry

Given today’s fast-changing job market, HR and managers need effective retention strategies. Replacing departing employees requires a lengthy process, so keeping staff is essential (Kapuściński et al., 2023). Increasing labour market dynamics and rising demand for better jobs have reduced employee loyalty to companies. Value can be created for various stakeholders when employees are skilled, dedicated, and share alignment with the company’s values.

M. D. I. Cunha (2016) identifies multiple determinants of employee turnover in the hotel sector, including inadequate recruitment practices, difficulties in adapting to organizational dynamics and irregular schedules, strained relationships with management, aspirations among younger employees for rapid advancement, and structural changes within the tourism industry. HRM in hospitality is further constrained by the seasonal nature of the labor market, which fosters short-term employment arrangements and frequent contract terminations. This volatility contributes to a negative perception of tourism-related occupations, thereby deterring candidates who seek long-term career stability (Ružić, 2015). Silvério (2017) states that talent retention relies on strategies fostering synergy between managers and employees. Without leadership that understands and values employee motivations and needs, talent cannot be sustained. Blum and Naylor (1968) state that the value of the company, management, colleagues, salary, promotion opportunities, and working conditions place on an employee shape that employee’s attitude (cited by Wright & Bonett, 2007). Talent retention is essential to talent management, especially in a competitive job market. Key factors include ongoing employee development, effective rewards, strong commitment, and a structure that supports high performance (Silvério, 2017).

Organizations that fail to retain their best employees will, by default, experience high turnover. Chiavenato (2020) defines employee turnover as the process through which organizations replace departing staff with new hires. The dynamics of the market have led companies to be increasingly subject to a continuous, dynamic process of integration and information sharing with employees who join the company. Wilkinson et al. (2010) identify several factors influencing talent retention and suggest that strategies should address the reasons employees stay or leave. De Vos et al. (2005) found that retention incentives fall into five categories: financial rewards, career development opportunities, job hierarchy, work environment, and work–life balance.

2.3. Generations Work in the Hotel and Tourism Job Market

The European Labour Authority (2024) reports that waiter positions are in shortage in 18 European countries (including Portugal), reflecting how hard it is to attract young workers to hospitality roles. Similarly, industry surveys show hospitality has one of the highest staff turnover rates (only ~21% annual retention in 2023)—indicating it’s not only hard to hire Millennials and Generation Z, but also to keep them (Forbes Advisor, 2023).

Thus, HRM is becoming increasingly vital for companies as it addresses generational differences, diverse motivations, and rapid technological change. Researchers often note that Generation Y/Millennials and Generation Z focus on immediate experiences and short-term goals. They tend to prioritize living in the present rather than planning extensively for the future. In contrast, Baby Boomers and Generation X were more likely to accept lower starting salaries and viewed employment as a lifelong commitment. The current market allows for comparison of intrinsic characteristics among different generations (Biswas, 2023). Solnet et al. (2016) observed that young talent is increasingly dominating the hotel workforce as older workers exit the industry. They describe this shift as a “perfect storm,” with the departure of older employees driving a rise in younger staff within the hospitality sector.

Burke (2015) observes that the increasing prevalence of higher education among individuals has elevated expectations regarding career trajectories within the labor market. A further determinant influencing recruitment in the hotel industry is the sector’s unfavorable public image (Solnet et al., 2016). These heightened expectations concerning professional advancement have compounded the complexity of recruiting candidates for operational positions in hospitality establishments. The hotel and tourism sector experiences high employee turnover due to low wages (Pindžo & Radulovic, 2019). Based on the work of Kusluvan et al. (2010) and Pindžo and Radulovic (2019), a set of characteristics of the workforce in the tourism and hospitality sector can be identified:

• Elevated employee turnover rates.
• Positions classified as unskilled or semi-skilled roles.
• Seasonality peaks.
• Low levels of employee productivity.
• Shares of labour from other countries (ethnic minorities and immigrants).
• Employees with low levels of educational qualifications.
• High percentages of young employees.
• Employees choose to have the hotel and tourism sector as their second job (e.g., part-time).
• Low levels of unionisation.
• Poor working conditions and HR practices include limited career advancement, low pay and benefits, no overtime compensation, repetitive tasks, irregular schedules that disrupt work–life balance, lower quality of life, and roles with high injury risk.

The hospitality sector is likely to hire less qualified staff to support operational departments (Solnet et al., 2016). Lower wages are typical for the most straightforward and repetitive jobs. Msearch (2018) found that the hotel and restaurant sectors are closely linked and play a key role in economic growth. As these industries expand, demand for skilled employees, particularly in middle and senior management, is increasing.

A 2019 Mercer study found that around 18% of hotel sector employees had higher education, while about 40% held secondary education qualifications (Publituris Hotelaria, 2019a). In the hotel sector, 75% of staff members have less than 7 years of service, and 65% have been employed for less than 3 years (Publituris Hotelaria, 2019b). Thus, it is safe to argue that this sector is turbulent and highly seasonal, leading to short-term contracts and preventing long-term employee retention in organizations. A report from the Inequalities Observatory, which examined the proportion of full-time employees covered by the national minimum wage, concluded that the accommodation and food service sector was among the leading sectors with the highest number of minimum-wage earners in Portugal between October 2015 and October 2016 (Cantante, 2018).

This evidence demonstrates that the present research is grounded in a real, contemporary problem: hospitality employers are indeed struggling to recruit and retain Millennial and Generation Z talent.

3. Methodology—Case Study

This study employs a qualitative case study design, focusing on hotel organizations in Porto (second major city), Portugal. A case study approach was chosen because it enables an intensive examination of the talent recruitment and retention challenges within their real-life context (Yin, 2018). Given that generational HRM issues are highly context-dependent—influenced by specific organizational culture, labour market conditions, and cohort dynamics—the case study method allows for a holistic and in-depth analysis. It is particularly suited for the defined ‘how’ and ‘why’ research questions, facilitating the use of multiple data sources (interviews, company documents) to triangulate findings and capture the complexity of the phenomenon (Warren & Bell, 2022). By studying this bounded system (a set of hospitality businesses) in detail, it is possible to uncover insights into Millennial and Generation Z workforce management that might remain hidden in a broader survey, thereby justifying the use of a case study strategy for this research.

It should be noted that the present qualitative design captures managerial perceptions of generational challenges rather than statistical differences. For example, the actual turnover rates were not measured by age group within each company. Instead, the interview questions (see Appendix A) probed the challenges in recruiting and retaining young employees as experienced by practitioners. This approach is appropriate for exploratory study, though future research might complement it with quantitative surveys or HR metrics to further substantiate generational effects. The interview protocol was structured to extract insights on the perceived characteristics of younger generations, the specific retention challenges these traits pose, and the HR strategies implemented to mitigate such challenges.

This qualitative case study involved structured interviews (Appendix A) with human resources managers or directors of hotel units. To achieve this objective, companies operating within the tourism sector were identified and subsequently contacted to schedule interviews aligned with the research focus. Of the 26 hospitality organizations contacted, 15 agreed to participate in the study, resulting in a total of 15 interviews with professionals directly involved in HRM or hotel operations. While the response rate reflects the practical constraints of conducting qualitative research in a time-sensitive and operationally demanding sector, the sample is nonetheless appropriate for the study’s exploratory aims. The participants were selected based on their direct involvement in recruitment and retention processes, ensuring that they possessed relevant experiential knowledge of the challenges associated with managing Millennial and Generation Z employees. The sample includes a balanced representation of small, medium, and large hotel establishments, and encompasses both HR managers and operational directors, thereby capturing diverse organizational perspectives. Although the sample size is modest, it aligns with qualitative research standards that prioritize depth of insight over breadth, particularly in case study designs (Stake, 1995). Thematic saturation was observed during the analysis, with recurring patterns and consistent themes emerging across interviews, suggesting that the sample was sufficient to address the research objectives meaningfully. Among the 15 interviewees, eight are responsible for hotel management or operations, and seven are responsible for human resources. Ethical issues regarding data protection information were assured by data collection, processed, and analyzed following the General Data Protection Regulation (EU) 2016/679 of the European Parliament and of the Council dated 27 April 2016. This regulation stipulates the protection of natural persons when processing personal data and oversees the free movement of such data. However, the interviews did not include any identifying questions. At the beginning of the questionnaire, respondents were informed about the study’s purpose and provided informed consent to participate.

The study used qualitative methods to analyze and categorize interview content. Coding involves first assigning open codes to the data to develop initial categories, then selectively coding around a central concept. This approach helped organize and adapt data analysis to fit the research questions (A. P. Costa & Amado, 2018).

3.1. Data Collection Technique

The data collection method impacts research outcomes (Van Campenhoudt et al., 2019), so it should align with the work’s objectives. Interviews use core communication processes and enable researchers to gather nuanced insights (Van Campenhoudt et al., 2019). In this sense, the interview is one of the most important and essential sources of information in case studies (Yin, 2005).

In a semi-structured interview, interviewees are more likely to express their views in a relatively open setting than in a standardized interview or questionnaire (Meirinhos & Osório, 2010). The researchers used a qualitative approach to collect data through semi-structured interviews. These interviews, featuring semi-open questions, aimed to identify key challenges in recruiting and retaining Generation Y/Millennials and Generation Z talent in the hotel industry and to explore HR strategies for addressing Millennial and Generation Z workforce issues. The interviewee authorized recordings to allow accurate transcription and thorough analysis.

After conducting and transcribing the interviews, the webQDA software 3.0 was used for analysis. Transcriptions were input and sorted by interviewees’ sociocultural data. Then, coding was applied to establish key categories and indicators (Neri de Souza et al., 2017). The interviews aimed to elicit explicit, logical opinions from participants, helping clarify and code the study’s central theme.

3.2. Content Analysis Methods

Content analysis involves highlighting key ideas and organizing them to understand better and remember written information (A. P. Costa & Amado, 2018). WebQDA was selected for this study because it is well suited to qualitative research. It provided technical support, improved speed and analytical rigor, and assisted with tasks like writing, annotation, transcription, data mapping, discourse analysis, and coding (A. P. Costa & Amado, 2018). With webQDA, content analysis organized interviewees’ ideas into three codes, creating categories and subcategories to qualify the information and support later conclusions.

3.3. Validation of the Information Collection Instrument

The instrument was validated to confirm its clarity, relevance, and alignment with study goals. Initially, a draft interview based on a literature review was created, including key questions, and reviewed by the advisor, who suggested improvements. Pilot tests were conducted with hospitality professionals. After a participant raised an important point, question 4 was restructured to address the link between qualification and training.

After the previously indicated change and validation of the interview script, it was forwarded by email to the gathered database. The interviews were conducted via video conference using Zoom software 6.7.0 version. They were recorded with participants’ consent and then transcribed.

4. Content Analysis

4.1. HR Function in Establishments

Table 1. HR Function vs. Establishment Dimension.

Establish Dimension	HR Function	Count
Large Company	Performed by Direction	0
	Performed by HR	3
Medium Company	Performed by Direction	1
	Performed by HR	8
Small Company	Performed by Direction	3
	Performed by HR	0

identifies the participants by the size of the hotel establishments and by the function they perform in the organization (senior management and responsible for the HR function). None of the large companies has the HR function performed by management. There is a directly proportional relationship between the size of the organization and who performs the HR function; that is, the larger the establishment, the greater the volume of work and the need for someone focused on the tasks inherent to the entire HRM.

Most of the participants belong to companies integrated into large groups, with a centralized HRD, and management of aspects associated with components such as needs assessment, incentives, and some training needs are usually carried out by unit directors and HR technicians in the field. Unit directors and HR technicians in the field usually carry out conflict management. HR plays a key strategic role, setting policies that align organizational goals with employee objectives (Chiavenato, 2020). “In the context of uncertainty, of permanent need to adapt to new realities and increasingly complex challenges, the main challenge of people management is to play an active role in the management of companies, to be a promoter and agent of change, anticipating the difficulties of the business”.

Some participants noted their organizations use shared service structures for central guidelines, with dedicated units handling operational activities. Pfeffer (1994) argues that, regardless of a formal HR function, key HR practices and policies should be consistently implemented across organizations of all sizes and strategies (as cited in Serra, 2017).

4.2. Key Dimensions of Work Associated with the Generation Y/Millennials and Generation Z Generation

Table 2. Main work dimensions associated with the Generation Y/Millennials and Generation Z.

Work Dimension	Count
Ambition and desire for rapid career advancement	12
Flexibility	10
Institutional Involvement	9
Continuous feedback and internal communication	8
Appreciation of a good working environment	7
Compensation	6
Recognition	4
Autonomy	2

below identifies and quantifies the main dimensions of the Generation Y/Millennials and Generation Z generation’s work. The characteristic that the participants most strongly quantified was ambition and a desire for rapid career progression.

Generation Y/Millennials and Generation Z often seek quick career growth, creating challenges for HR. If they do not advance quickly, they tend to change companies rather than wait for internal opportunities. The interviewees validate a direct relationship between qualifications and greater professional expectations at the management level. Interview responses confirm that Millennials value a positive work environment, fair pay, recognition, flexibility, ongoing feedback, engagement, and autonomy as primary motivational factors.

The conclusions align with previous research. Winter and Jackson (2016) report that Millennials seek rapid promotion and will change jobs if not achieved, while Kultalahti and Viitala (2015) note that Millennials expect regular feedback from supervisors (Filipe & Afonso, 2018). In short, millennials are a generation characterized by continuously seeking motivational factors in the world of work and in their personal lives, a constant need to want more in a short period of time.

4.3. HRM Strategies/Practices Associated with Talent Retention

Table 3. Identified talent retention strategies.

Retention Strategies	Count
Team Building	3
Importance of the recruitment and selection process	3
Image of the organization in the labour market	6
Benefits	6
Training	7
Progression opportunities	7

identifies and quantifies the main talent retention strategies identified by the participants in the study.

Madeira (2013) note that reward systems, career advancement opportunities, management style, and organizational structure all influence talent retention. Therefore, organizations should use multiple strategies to address diverse employee needs and ensure effective retention. Since individuals have unique goals and ambitions, companies must adapt to these differences to retain talent. The interview analysis identified several talent retention strategies: organizational image and reputation, team building, advancement opportunities, benefits, training, and an effective recruitment and selection process.

As labor market dynamics evolve and expectations for improved employment conditions intensify, employee loyalty tends to diminish. To mitigate turnover, organizations must prioritize the development of a strong corporate reputation and cultivate positive employer–employee relationships, thereby reducing incentives to seek alternative positions offering higher remuneration. Several interviewees emphasized that participation in high-profile projects or employment within reputable organizations enhances professional visibility and confers recognition, enriching curricula vitae through experience with premium initiatives and distinguished brands. Consequently, attracting and retaining skilled personnel requires the implementation of strategic human resource practices that promote commitment, foster organizational belonging, and align individual values with those of the enterprise. Several organizations in the study adopt internal talent development strategies, providing employees with opportunities for career progression and advancement within the firm. This approach serves as a retention mechanism by reducing the propensity to seek external employment. Participants further emphasized the role of employee benefits as a complementary strategy, encompassing health and well-being programs, discounts on company products and services, financial incentives, and other forms of supplementary compensation. Additionally, respondents highlighted the importance of training initiatives aimed at both personal and professional growth, investment in internal career pathways, and proactive measures to address labor shortages within the sector.

4.4. Generational Differences

Participants frequently generalized distinctions between older and younger cohorts, leading to the classification of characteristics into two broad categories: “Baby Boomers and Generation X” representing older generations, and “Millennials and Generation Z” representing younger ones. It is important to note that respondents acknowledged the difficulty of making such generalizations, as exceptions inevitably exist; however, certain points of convergence were identified across their responses. As Howe and Strauss (2007, p. 2) emphasize, understanding a generation requires consideration of diverse factors, including childhood upbringing, formative public events during adolescence, and the social mission embraced in adulthood (as cited in Freitas, 2014). Moreover, shared birth periods do not guarantee uniform life experiences, underscoring the complexity inherent in generational analysis. Responsibility emerges as a salient characteristic among Generation X and Baby Boomers, who typically exhibit higher levels of job commitment, stronger adherence to ethical principles, and greater compliance with organizational norms compared to younger cohorts. As several participants explain: Participant 10: “With the due exceptions in both generational groups, younger people tend to show a higher absenteeism rate than older people…”; Participant 9: “…what is noticed in today’s young people, once again generalizing, there are also inverse cases, but the fragility of the bond, that is, we are capable of having people who miss work, and who do not communicate to the boss, communicate to the colleague and this may be in my generation or in other previous generations, it was unthinkable.”; Participant 9: “Because if a person is absent from work, naturally they have to warn; therefore, this type of attitude that seems normal to them and there, in fact, there is a difference in attitude towards this commitment and this loyalty to the leadership in this case and consequently to the company…”; Participant 7: “Compliance with rules: it is evident that a 20-year-old person is “more rebellious”, he is much more challenging in terms of guidelines and procedures…” Participant 9: “There is, in fact, a fragility and superficiality of the bond, which is not taken so seriously by this generation. I would say this is a factor in their easy, quick detachment from places. Eventually, there may be some pattern here in this aspect.”

Baby Boomers and Generation X typically prioritize employment stability, whereas younger cohorts, such as Generation Y/Millennials and Generation Z, are more inclined toward seeking diverse experiences and exploring varied opportunities.

Participant 12: “In Generation X, when you pick up a phone (those old phones that you rotated), if you made a mistake dialing a number, what happened was that you had to hang up and dial the number again. Nowadays, if you press a phone/cell phone, click delete. They do not have to turn it off, error is no longer a problem, failure is not as much of a problem as it was for previous generations, and you see that, in your day-to-day, the younger generation is not afraid to experiment, it is not a problem for them to do an experiment and then eventually go wrong, do it again, but in a different way.” Participant 11: “We have to be aware that in previous generations people were looking for something stable, nowadays people are looking for experiences, they are looking for different things…” Participant 6: “The older generations end up being the most loyal, they have a market experience that Millennials do not have, they have been working in the market for many years, and some of them are already making a retirement plan and looking for a place that lets them ‘retire’, obviously, they are looking for good working conditions…”.

Sometimes older generations show resistance to change, as some participants point out: Participant 2: “… the older generations have some reluctance to make the innovation that has been implemented right away…”. One participant identifies proximity as an important factor in solving the problem and managing daily issues. Participant 13 “… They are effectively baby boomers, the approach has to be a little different, the technology is not so easy, but we have a different way of dealing with it, sometimes in the computer part I am the one who ends up solving the problems, that is, there a little more affection, always being careful when to enter and when you leave to go to the office, go to their work area and they realize that we are there for them”. In short, sometimes it is necessary to face change positively, support its implementation, and demonstrate that the innovation, when implemented, will improve the performance of its functions. Participant 11: “In the current Generation Y/Millennials, it is different, in that we ask for ideas and suggestions and they make them available and are receptive to making changes…”; “…These current generations are more flexible for alterations and changes, they do not pose as many obstacles as previous generations (generation x and baby boomers).”

Participant 12: “When you compare them with the younger generations, they are more technological generations, in the digital world, more practical, they are more diverse, they have no problem testing new things, they have no problem having new experiences, that is, they are at a stage where they are not afraid to make mistakes…”.

Some participants say motivation has a deadline. As a rule, younger generations retain it for only a short time, being more intense at the beginning of their careers, as Participant 5 stated: “… Millennials and Generation Z are the most motivated and engaged, but for short periods, motivation and commitment have a deadline.”

Participant 2: “There are some differences, in terms of motivation, I would say that the younger ones have innate motivation, because they are at the beginning of their careers and often arrive at the unit and have many ideas to try to implement and improve the service…”.

Participant 9: “Since most of our population is Millennial, it is dangerous to generalize because we have everything. If you ask whether there is a pattern, the pattern is that they are more impatient people who grow up very quickly, and clearly, there is a difference; it naturally affects motivation. In performance itself, if a person is anxious to want to evolve and see that so soon, they have no chance, they will probably lose motivation and leave…”.

4.5. Challenges of Multigenerational Management in HR Management

Participants highlighted key areas in multigenerational HR management: adapting policies and benefits, communication styles, organizational strategies, and conflict resolution. Meeting all generational preferences is difficult, so companies should acknowledge diverse needs and update procedures and policies accordingly.

Participant 14: “Multigenerational Management brings challenges to deal with people with different personalities. Currently, the culture is also different from what it was a few years ago. Right now, it is about having leaders who can deal with these people and these diversities of personalities…”.

Participant 12: “One of the main difficulties/challenges is communication, and what kind of information do people want, perhaps, for someone who is already 50 years old and is carrying out his activity, probably the information he wants is communication that helps him in what he has to do, that facilitates it in terms of processes […] In terms of communication itself, the way in which the issues are addressed […] I have to be aware, at the HR level, if I sit down and talk to someone who has a 30-year career, and who is 50 or so years old, the way I will talk to him and listen to him, is completely different from the way I will talk to someone who has a 3-year career and is 25 years old…”.

Participant 9: “… we had a completely young hotel, the other projects came to add much older generations. From the outset, there was a strong concern to integrate everything […] we are fully aware that there must be harmonization between the various generations. Knowing that they are different attitudes and ways of being in their professional activity, and therefore, it was up to us to do a job of standardizing various HR processes, benefits, and salary issues, we had to try to harmonize many things to be as equitable as possible before the organization and treat everyone equally…”.

Participant 8: “Even sometimes in meetings and team buildings, sometimes it is a little difficult to be able to do activities that please everyone…”.

Participant 5: “We have to identify, through dialogue with HR, the behaviours and needs of each generation…”.

Participant 3: “The biggest challenge in multigenerational management is the fact that we have to respond with policies and procedures adjusted to everyone, trying to retain the best employees and train employees with potential, responding to what each one seeks to feel fulfilled […] “We have a single HR policy under development based on an Integrated HR Model, that is, starting by identifying the company’s culture, values, mission and strategy, seeking to link all human resources policies (function and competence model, recruitment and selection, performance evaluation, training, compensation and benefits, careers and succession plans). In this way, by developing adjusted policies and procedures, we will be able to ensure that we respond to the challenges of multigenerational management.” Participant 12 “… The benefits that are important to me will not be the same for you. I have to offer a range of benefits, with the possibility of choice, and give people the chance to choose…” The individualization of benefits becomes important because it conveys the idea of individualized needs, leading you to focus on the individual rather than the collective.

Participant 11: “… It is necessary to take into account the type of strategy to direct a particular person in the organization. Sometimes it is necessary to have some flexibility to remove addictions and resistance to change…”.

Participant 9: “The benefits may also be generic and transversal to all generations, but, at least in our units, the bulk of people are from the Millennial generation, so we obviously have to adapt what may be the interests and tastes of this generation […] it often leads to us having to develop many tools and skills in terms of conflict management, human relations, since there can be this generational clash sometimes…”.

Participant 7: “When it comes to generational shocks, there will always be … we must pay attention to a certain point, that he is no longer able to perform a certain task, or that we must put a person in a certain team in which he is more compatible…”.

Participant 2: “I usually meet with people when there is a mismatch of ideas, and I usually get together with the operatives, which helps. When I notice that something is not right, I bring it up myself and try to understand […]. Essentially, I have a lot of dialogue with people to solve the challenges between generations…”.

4.6. Recruitment Sources Used in the Recruitment and Selection Processes

The study analyzed participants’ key recruitment sources and the characteristics associated with those sources. Most participants used external sources to manage the recruitment challenges described below.

As illustrated in

Table 4. External sources.

Sources	Count
Professional networks	9
Job sites	9
Social networks	8
Schools	7
Spread the word	6
Open days	1

, professional networks emerge as the most frequently utilized external recruitment source, followed by job portals, social media platforms, educational institutions, word-of-mouth referrals, and open day events. Among these, professional networks—particularly LinkedIn—are predominantly employed for sourcing candidates for back-office, managerial, and senior operational roles, owing to their cost-effectiveness and targeted reach. However, participants reported limited success in using LinkedIn to recruit for frontline operational positions such as waitstaff, cupbearers, and housekeeping personnel, citing a scarcity of suitable candidate profiles for these roles on the platform. Notably, 47% of respondents identified schools and educational institutions as a relevant channel for attracting entry-level talent, underscoring the importance of partnerships with academic entities in addressing recruitment needs. Data from the 15 participants show that 33% use internal recruitment sources, while 67% do not mention this option. 33% of respondents consider internal recruitment when a qualified candidate is available. Recruitment can also motivate employees to take on new challenges and adapt to change.

4.7. Difficulties Associated with Recruitment

The tourism and hospitality sector has undergone significant growth in Portugal in recent years, boosting the country’s economy and providing new jobs (IPDT Consultoria Turismo, 2020). The law of supply and demand determines the remuneration levels practiced in the market, often leading to changes among employees in search of new and better remuneration opportunities.

Most participants assessed that one of the reasons for the difficulty in recruiting was the growth of tourism in recent years and, consequently, the opening of new establishments linked to the sector. Another characteristic mentioned by the participants is the lack of human resources to respond to all the needs that have arisen with the growth of tourism in Portugal. The fact that there are more companies hiring credits, a greater range of job offers and the ease of change for workers operating in the sector. Failure to update company policies to align with competitors can hurt employee retention. Understanding key sector traits is essential for effective recruitment and selection.

Three participants noted that recruiting is challenging due to society’s negative perception of hotel and tourism jobs, which are often seen as low paying, requiring little education, and considered a last resort for employment.

4.8. Characteristics and Constraints Affecting the Tourism and Hospitality Sector

Table 5. Characteristics and conditioning factors that affect attraction to the hospitality and tourism sector.

Conditioning Factors	Count
A sector that makes it challenging to balance personal and professional life	14
Low wages	12
Irregular schedules	14
Physical effort	6
Establishment Location	4

quantifies participant-identified constraints and attraction factors in tourism and hospitality.

The study’s data show that 93% of participants acknowledged the significance and challenges of work–life balance in the sector. Operational roles make balancing work and personal life more challenging, but most participants report flexibility in schedules to address personal matters.

Some authors suggest that Millennials prioritize work–life balance over work, so flexible schedules are needed to maintain their performance (Gursoy et al., 2008; Kultalahti & Viitala, 2015; Twenge & Campbell, 2012, cited by Filipe & Afonso, 2018).

Analysis of participant responses reveals that 93% acknowledge the presence of sector-specific characteristics influencing attraction to tourism and hospitality roles, notably low remuneration levels. Furthermore, 40% of respondents perceive these occupations as physically demanding, which constitutes an additional barrier to recruitment. Two participants emphasized that organizational location significantly impacts talent acquisition, as economic and personal constraints exacerbate challenges related to hiring and employee retention. Findings indicate that 40% of participants identify seasonality—an external structural factor—as a significant constraint on the sector’s capacity to attract labor. Seasonal fluctuations in demand necessitate short-term contractual arrangements, resulting in limited employment stability for workers anticipating termination at the close of each season. Additionally, 93% of respondents assert that the sector’s atypical scheduling patterns—distinct from the conventional Monday-to-Friday workweek with weekends off—further hinder recruitment efforts. Continuous year-round operations require sustained staffing to ensure uninterrupted service delivery.

Table 6. Functional areas with the most significant difficulty in the recruitment process.

Functional Areas	Count
Table Waiter	14
Kitchen	14
Front Office	10
Maintenance	11
Housekeeping	12

presents data on participant validation for functions that are more difficult during the recruitment process. The available data did not enable detailed validation of specific functions. However, the results indicate that challenges persist in the Food & Beverage (F&B) area, particularly in table service and kitchen roles. Recruitment for Front Office and Maintenance roles presents fewer challenges. Since the question focused on identifying the most difficult functions to recruit for, we did not analyze differences among participants.

Collectively, these results illustrate the complex interplay of generational traits and HRM challenges in hospitality, underscoring why a one-size-fits-all talent management approach is inadequate.

Overall, the results demonstrate that recruiting and retaining Millennial and Generation Z employees for hospitality is indeed challenging, but not insurmountable. It was found that younger cohorts bring different expectations (e.g., desire for rapid advancement, digital fluency, emphasis on work–life balance) that clash with traditional hospitality working conditions. This generational mismatch has led to high turnover and staffing shortages in key operational roles, confirming what anecdotal industry reports have suggested. The next section will summarize the key insights and suggest avenues for future research.

5. Conclusions and Limitations

This study examines the main HRM challenges, strategies for managing different generations, and Millennial-focused recruitment and retention practices, based on insights from top Management and HR leaders in the hotel and tourism sector in Portugal. The results show that Generation Y/Millennials and Generation Z are ambitious, seek rapid career advancement, value flexibility, and want to be involved in their organizations. They appreciate ongoing feedback, a positive work environment, and effective internal communication.

Professionals interviewed noted significant recruitment challenges in the sector due to high competition, abundant opportunities, and negative public perception. These findings align with current literature. The fieldwork confirms that the sector faces challenges, including labour shortages due to low pay, irregular hours, difficult work–life balance, physical demands, and seasonal fluctuations.

The current labour market includes employees from five generations. Participants noted that older generations (Baby Boomers and X) tend to show greater responsibility and job stability but may also be more resistant to change than younger generations (Y and Z). Younger workers generally face less job security. Some participants found it hard to generalize due to individual differences but suggested that fostering close communication can help older employees adapt to change.

Multigenerational management requires organizations to adapt their policies, benefits, communication styles, and conflict resolution approaches. Participants emphasize the importance of recognizing generational needs so companies can adjust procedures and policies accordingly. HRM plays a vital role in finding efficient recruitment sources. External options, such as professional networks, job sites, social media, and schools, are more commonly used than internal ones. The findings indicate that opportunities for career advancement, training, benefits, the organization’s labour-market reputation, and a robust recruitment and selection process are associated with increased motivation in talent retention.

In conclusion, this study confirms that Millennials and Generation Z are indeed more difficult to recruit and retain in the hospitality sector. Their distinct workplace expectations—such as a desire for flexibility, meaningful work, and swift career advancement—often clash with the industry’s structural limitations. These generational traits, as evidenced by the perspectives of HR managers and hotel directors in Porto, contribute to persistent staffing challenges and underscore the need for tailored HRM strategies.

Regarding theoretical implications, the conclusions reinforce generational theory in the workplace, providing empirical evidence that Generation Y/Millennials and Generation Z workplace behaviors are influencing organizational outcomes in tourism. Prior research was extended by illustrating how these behaviors play out in a post-pandemic Portuguese context, where an abundance of opportunities empowers young workers to be selective. In terms of practical implications, for hospitality HR managers and leaders, the presented results underscore the importance of adaptability in HRM practices. Companies that proactively offer clear career pathways, foster inclusive multigenerational cultures, and improve job quality (e.g., better schedules, competitive compensation) are more likely to attract and retain young talent. In essence, a tailored approach to HRM—one that acknowledges generational differences—appears crucial for addressing the talent crisis (a shortage of skilled workers, particularly young entrants) in tourism and hospitality.

The study’s timing, conducted before the COVID-19 pandemic, limited its findings, as pre-pandemic conditions—such as full employment in the sector—affected participants’ responses. Interview delays also affected the study, as many tourism and hospitality workers were on layoff or unavailable due to reduced staffing and time constraints at their companies. Also, methodologically, the study used a qualitative case study approach with 15 semi-structured interviews (out of 26 companies contacted) in the Portuguese hospitality sector. While this approach yielded rich, in-depth data, it inherently limits generalization of the findings.

6. Future Research

To address the limited generalizability of the present qualitative case study, future research should consider larger-scale studies across different contexts. A comparative approach could be highly illuminating. For example, replicate this study in other geographic regions—such as Northern Europe, Asia, or North America—to see if Millennial and Generation Z recruitment/retention challenges in hospitality are similar or if they vary culturally.

Also, future research should complement qualitative insights with quantitative data to validate and extend the current findings. A natural next step would be a survey-based study involving a larger sample of hospitality organizations (or employees) to test the prevalence of the challenges identified. Finally, future research could explore other segments of the tourism and hospitality industry and even adjacent sectors to see if the current findings still apply.