This is the way it works pretty much anywhere. A personal recommendation from a trusted employee or someone they know is worth a lot more than an application submitted from someone unknown.

They're just explicitly stating that although knowing the right people is not a requirement, it will work a lot better in getting you in the door.

My current company, in fact, has grown almost entirely from employee recommendations, and it has worked out well. The fact that you know someone is good from previous experience greatly reduces the chance of getting someone who doesn't work out.