Hiring managers love referrals. You can spend weeks going through resumes and doing interviews hoping to find that perfect candidate (and they better be as perfect as can because you won't be able to just get rid of them on a whim if they wind up being a dud). There's also nothing more frustrating than giving an offer to a great candidate and then losing our on them.
Hiring referrals is great for both problems. The person is already vetted by someone your organization trusts. This is great because a referral is more likely to be someone that knows their stuff and thus pass the interview process. You also have someone vouching that this person is a good employee and not just a good interviewer. The candidate is more likely to accept when they have a contact on the inside that can vouch for the the company and team.
This all assumes that the company is going to do their own independent evaluation of the referred candidate.
Hiring referrals is great for both problems. The person is already vetted by someone your organization trusts. This is great because a referral is more likely to be someone that knows their stuff and thus pass the interview process. You also have someone vouching that this person is a good employee and not just a good interviewer. The candidate is more likely to accept when they have a contact on the inside that can vouch for the the company and team.
This all assumes that the company is going to do their own independent evaluation of the referred candidate.