7 Pillars of BBBEE
FHH Consultants provides an exclusive set of solutions that includes Recruitment, Human Resources, Industrial Relations and Payroll Services. We are passionate about facilitating employment related matters at the highest calibre.
In this article, we will be discussing everything you need to know about BBBEE compliance and what the 7 Pillars of BBBEE are.
To begin with, it would be important to understand the acronym “BBBEE” and the significance behind the compliance and legislation. Broad Based-Black Economic Empowerment strives to stimulate the process of participation of previously disadvantaged groups in the economy. The underpinning fundamentals are to increase economic growth and create an inclusive society that is fair and just in terms of societal diversity.
According to the legislative elements of the BBBEE Act, the 7 pillars are summarised below as:
- Preferential Procurement
This is the measured extent to which an organisation conducts business with BBBEE suppliers, black micro businesses. Outsourcing services that are BBBEE compliant supports diversity in their ownership. This element comprises 20% in the BBBEE Scorecard.
- Skills Development
The Skills Development element includes 15% of the BBBEE Scorecard and would measure the extent to which employers implement initiatives to promote the development and competencies of their staff, specifically Previously Disadvantaged Individuals (PDI’s) so that they can be promoted.
- Equity Ownership
20% of Equity Ownership is required on the scorecard to promote the number of individuals who own and control their own businesses. This promotes inclusivity in shareholding and opportunities are created for owning a business.
- Enterprise Development
This element encompasses 15% of the scorecard which would include aspects of initiatives to assist and accelerate the development of other enterprises to ensure shared wealth distribution in the economy.
- Employment Equity
The representation of varying levels needs to be present in organisations. This needs to continually be planned and revised to be up to standard with compliance.
- Corporate Social Investment
CSI is measured by the implementation of specific initiatives that contribute towards social development to facilitate access to the economic benefits the country has to offer.
- Socio-Economic Development
Focusing on education, health and other social development areas and programmes for women, youth outreach programs, people with disabilities as well as training and skills development. Additional components would include environmental conservation, arts & culture as well as recreational sporting activities.