Zurich Insurance Group senior HR manager Mandy Wong focuses on making sure her 450 staff are happy in their jobs so they will think twice before jumping ship.

The year 2000 is still clear in her mind - when the government introduced the Mandatory Provident Fund and experienced insurance personnel were in such high demand that staff turnover went through the roof.

Ms Wong has enjoyed the recent let-up in staff movement and is determined the buoyant mood in Hong Kong will not mean too high an increase in staff turnover for her company.

'A stable workforce will have an impact on staff morale and that will have an impact on business,' she said.

Ms Wong said it is more important for businesses to focus on holding on to their existing staff and the knowledge they gained with the company, than concentrate on recruitment.

It is expensive to recruit, expensive to train and therefore much more cost effective to put in place systems to keep staff happy.

'We [concentrate on] retention rather than reactive action,' she said.

People leave a company because they may have been offered a more competitive salary elsewhere, or are lured away by the promise of more training and development opportunities to help them grow in their profession. Often the reasons are personal - an inability to balance life and work which has led to unhappiness with their employer.

HR departments try to pre-empt these reasons with careful planning and targeted policy making. 'For retention, you cannot have one quick solution. This is always a long-term [process],' Ms Wong said.

The first step is to employ people who suit the culture of the company. Once they are on board, making them feel welcome and instilling a sense of family is key to encouraging security and loyalty. Competitive remuneration packages and performance-related incentives are also helpful.

Although there are no guaranteed methods in employee retention, Ms Wong said it is crucial for the HR team to understand employees' needs and translate these needs into policies.

She asks her staff to complete a culture assessment survey once a year and the responses to this go a long way towards helping her know how her staff feel about the company and where they are looking for improvements.

'Of course, communication and trust are very important,' Ms Wong said.

She said all Zurich's staff policies were transparent and easily accessed on the company website.

She encourages employees to see her department as something of a safe haven. She wants them to feel they can bring their work problems to her, purposely adopting a neutral role, so she can act as a bridge between the company and the employee.

Ms Wong's department also focuses on staff caring activities. Staff are encouraged to take part in non-job related activities - social events such as barbecues, or bowling - and they are encouraged to bring their families and spend some time with colleagues out of the office. They also get involved in organising these events, sit on committees and mix with colleagues from other departments.

Ms Wong tries to share some of the hot topics in Hong Kong with her staff. Last year she organised a seminar on emotional illness to help employees manage stress during the outbreak of Sars. Recently, a health professional gave a talk on how to manage a healthy diet and offered on-site body fat percentage tests.

'We see very good participation. [We try] to make them not only think [about] work, but have some balance of life.'

Despite all her efforts to retain staff, Ms Wong accepts there will be turnover in an average year of about 10 to 20 per cent and she is happy with that figure.

'No turnover [of staff] may not be good news for a company. You need new blood, you need new ideas,' she said.

Staff turnover is a fact of business and it would be foolish to keep unproductive staff on board simply to ensure low staff turnover. HR departments should concentrate on keeping the staff that matter, on hanging on to the real talent, thereby ensuring high productivity.

Firms should have a good eye for potential leaders and invest in their training and development. Zurich chooses 20 managers a year as potential leaders and sends them on a two-year Executive MBA course run by Lingnan University.