There are a few things here. Primarily, job movement is motivated by the desire to get out of an existing job more often than by the desire for another positio

There are a few things here. Primarily, job movement is motivated by the desire to get out of an existing job more often than by the desire for another position. So there's no surprise that candidates who apply internally are also applying externally due to some intrinsic dissatisfaction with the current role, and failing to find an internal transfer they take the external route. A fraction of those looking to move, are looking because they are failing in their current role and they want to get out before a bad review/termination comes down on them. Candidates like this are much less likely to make it further in the process (eg manager interview) and more likely to just be rejected at the onset or not even be qualified for a transfer due to current performance. There's no surprise that people like this end up leaving the company most often. Another one is ego - people often apply for positions they are wildly unqualified for because they don't actually understand the requirements (eg: a role may call for "senior stakeholder management" which means your ability to hold your own and build relationships with senior executives, but someone may not recognize that depth and think they can manage stakeholders because they have good rapport with their product manager.) When people get rejected from these roles, ideally they become aware of the qualification gap and work to close it, but it's easier to say "oh, the company doesn't appreciate me and my skills" and turn sour. The point I am making here is that the internal transfer situation is laden with people who are either motivated to move somewhere and for one reason or another maybe shooting for roles they aren't going to get, which sets them up for an experience of rejection. Neither one of these things is good for retention. Internal transfers are great (I probably had 10 jobs in one company I used to work in) but it's an inherently tricky situation to navigate. Often, people gripe about "oh, they just wanted to hire someone from the outside" without recognizing the skills/experience/perspective the outside hire brings in.