Well i believe; that for a Software company like MS; it should give software for free to its employees instead of hardware - if it really wants to show that it cares. Most employees will belong the software field and will most definitely feel cared; if software is given to them for free - inorder for them to explore their own development/testing potential along with exploring the product potential. Also by giving the software for free; when an employee leaves the company; due to his/her interest in what the software product can deliver; they become lifelong customers - buy product upgrades and related software.

as far as attrition goes; well I guess it is bound to happen in case of experienced employees, no matter how great the company is; 'cause as one moves up the ladder; number of higher positions(across various teams) start to decrease. Talented employees hungry to explore their capabilities will leave for sure due to lack of opportunity.

As far as people outside MS wanting to join - guess will automatically happen if MS meets their requirements(job satisfaction + money + environment). The case most generally is that a company will find a replacement for a vacant position on its terms(there may be exceptions). But, It need not give hardware for free to its employees - inorder to send a message to the outside world - but rather give Software for free. Software given free to its employees means a opportunity to grow; and guess that would definitely attract outsiders to explore.