Employees tend to talk more freely with an outside person then with someone within the organization. An outside person would have no agenda; an inside person has the organization’s agenda.
This does not have to be an either/or situation. External coaches can complement internal coaches by mentoring those coaches or working with specific individuals within the organization who prefer or demand to work with an external coach due to the nature of their job. For example, it is very common for senior management to open up only to an external coach due to the sensitivity of issues they are working on. No matter how good internal coaches are, if the focus of the coaching is on strategic issues that could affect the job security of the internal coach, executives may not feel free to discuss them.