The demand for medical services has been increasing yearly in aging countries. Medical institutions must hire a large number of staff members to provide efficient and effective health‐care services. Because of high workload and pressure, high turnover rates exist among health‐care staff members, especially those in nonurban areas, which are characterized by limited resources and a predominance of elderly people. Turnover in health‐care institutions is influenced by complex factors, and high turnover rates result in considerable direct and indirect costs for such institutions (Lo and Tseng 2019). Therefore, health‐care institutions must adopt appropriate strategies for talent retention. Because institutions cannot determine the most effective talent retention strategy, many of them simply passively adopt a single human resource (HR) policy and make minor adjustments to the selected policy. In the present study, system dynamics modeling was combined with fuzzy multiobjective programming to develop a method for simulating HR planning systems and evaluating the suitability of different HR policies in an institution. We also considered the external insurance policy to be the parameter for the developed multiobjective decision‐making model. The simulation results indicated that reducing the turnover rate of new employees in their trial period is the most effective policy for talent retention. The developed procedure is more efficient, effective, and cheaper than the traditional trial‐and‐error approaches for HR policy selection.