Official Statistics

Economic Estimates: Earnings 2023 and Employment October 2022 to September 2023 for the Digital Sector - Technical and quality assurance report

Updated 3 May 2024

1. Overview of release

The statistics release ‘Economic Estimates: Earnings 2023 and Employment October 2022 to September 2023 for the DCMS Sectors and Digital Sector.’ provides estimates of the earnings of employees in the digital sector in the UK for 2023 and estimates of the Gender Pay Gap (GPG) in the digital sector sectors, and the number of filled jobs in the digital sector for the 12-month period between October 2022 to September 2023. 

Estimates for the number of filled jobs are derived from a single data source (Annual Population Survey, or APS) and contain breakdowns including, but not limited to, employment type (i.e. employed or self-employed), region of work, nationality, sex and ethnicity.

Employment estimates based on APS data are an average over the 12-month period from October 2022 to September 2023.

Estimates for median annual earnings and median weekly earnings for digital sector employees are based on the Annual Survey of Hours and Earnings (ASHE) dataset. This dataset is provided by the Office for National Statistics (ONS) and is the most robust source of earnings information in the UK.

DCMS also publishes earnings estimates using the Annual Population Survey (APS), which contains breakdowns including, but not limited to, employment type (i.e. employed or self-employed), region of work, nationality, sex and ethnicity. As the APS provides self-reported earnings figures, users should be aware the APS is not the preferred source for earnings estimates at the aggregate level, with estimates based on the ASHE (Annual Survey for Hours and Earnings) providing a more robust measure.

In February 2023, Machinery of Government changes meant that responsibility for the Digital and telecoms sectors moved from DCMS to the newly created Department for Science, Innovation and Technology (DSIT). Although previously included in the DCMS Sector employment and earnings estimates, estimates for the Digital and telecoms sectors are now presented separately.

The Office for National Statistics (ONS) is the provider of the underlying data used for the analysis presented within this release. As such, the same data sources are used for DCMS estimates as for national estimates, enabling comparisons to be made on a consistent basis.

1.1 Official Statistics Accreditation

In June 2019, a suite of DCMS Sector Economic Estimates, including employment estimates, were independently reviewed by the Office for Statistics Regulation (OSR). They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled accredited official statistics. Accredited official statistics are called National Statistics in the Statistics and Regulation Service Act 2007. 

This followed a report by the Office for Statistics Regulation in December 2018, which stated that the series could be designated as National Statistics subject to meeting certain requirements. Since the report, we have striven to improve our publications by providing summaries of other notable sources of data, more detail on the nature and extent of the overlap between the sectors, and further information on the quality and limitations of the data. We will continue to improve the series in the future, in line with the recommendations of the report. We encourage our users to engage with us so that we can improve our statistics and identify gaps in the statistics that we produce.

Earnings estimates are official statistics that have not yet been reviewed and accredited by the OSR but are produced in line with the standards of trustworthiness, quality and value in the Code of Practice for Statistics.

Our statistical practice is regulated by the OSR. OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to.

You are welcome to contact us directly with any comments about how we meet these standards by emailing evidence@dcms.gov.uk. 

Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website. 

1.2 Users

The users of these statistics fall into five broad categories:

• Ministers and other political figures

• Policy and other professionals in DSIT and other government departments

• Industries and their representative bodies

• Charitable organisations

• Academics

The primary use of these statistics is to monitor the performance of the industries in the digital sector, helping to understand how current and future policy interventions can be most effective.

2. Sector definitions

In order to measure the size of the economy it is important to be able to define it. The digital and telecoms sector definitions are based on Standard Industrial Classification 2007 (SIC) codes. This means nationally consistent sources of data can be used and enables international comparisons.

Although telecoms is considered as a sector in its own right, the telecoms sector is completely contained within the digital sector as defined by SIC codes.

In February 2023, the machinery of government changes meant that responsibility for the Digital and telecoms Sectors moved from DCMS to the newly created Department for Science, Innovation and Technology. Following this change, many of the industries included in the digital sector still form part of the DCMS industry definition, as they are included in the definition of the creative industries.

2.1 Details and limitations of sector definitions

This section looks at sector definitions used in this release in more detail and provides an overview of limitations.

There are substantial limitations to the underlying classifications. As the balance and make-up of the economy changes, the SIC, finalised in 2007, is less able to provide the details for important elements of the UK economy related to the digital sector. The SIC codes used to produce these estimates are a ‘best fit’, subject to the limitations described in the following section.

Digital sector

The definition of the digital sector is based on the OECD definition of the ‘information society’. This is a combination of the OECD definition for the “ICT sector” as well as including the definition of the “content and media sector”. An overview of the SIC codes included in each of these sectors is available in the OECD Guide to Measuring the Information Society 2011 (see Box 7.A1.2 on page 159 and Box 7.A1.3 on page 164).

The definition used for the digital sector does not allow consideration of the value added of “digital” to the wider economy e.g. in health care or construction. Policy responsibility is for digital across the economy and therefore this is a significant weakness in the current approach.

Telecoms

The definition of the telecoms sector is consistent with the internationally agreed definition, SIC 61, Telecommunications. Please note that as well as appearing as a sector on its own, telecoms is also entirely included within the digital sector as one of the sub-sectors.

Other sector definitions

Additional analysis is presented for the audio-visual sector and the computer games sector. The definition of the audio-visual sector (see below) is intended to reflect the sectors covered by the EU Audio-Visual Media Services Directive.

• 59.11 - Motion picture, video and television programme production activities

• 59.12 - Motion picture, video and television programme post-production activities

• 59.13 - Motion picture, video and television programme distribution activities

• 59.2 - Sound recording and music publishing activities

• 60.1 - Radio broadcasting

• 60.2 - Television programming and broadcasting activities

• 63.91 - News agency activities

• 63.99 - Other information service activities n.e.c.

• 77.22 - Renting of video tapes and disks

• 77.4 - Leasing of intellectual property and similar products, except copyrighted works

The computer games sector combines the 4-digit SIC code 58.21 (Publishing of Computer Games) and 62.01/1 (Ready-made interactive leisure and entertainment software development).

A number of software programming companies in the whole SIC code 62.01 – ‘Computer programming activities’ may also contribute to the output of computer games, as part of a range of programming activities. Only a subset of these (those in 62.01/1) are included in these computer games estimates, however, they will all have been implicitly included in the ‘IT, software and computer services’ creative industries sub-sector in the main estimates.

3. Methodology

3.1 Data Sources

In this release, employment statistics are calculated using the Office for National Statistics (ONS) Annual Population Survey (APS). Earnings statistics are calculated using the ONS Annual Survey of Hours and Earnings (ASHE) dataset.

Annual Population Survey

The APS is a household survey that combines four quarters of the Labour Force Survey with an additional sample boost. Information collected includes the details of employment (e.g. location, industry, seniority, occupation, income), circumstances (e.g. housing tenure, health) and demography (e.g. nationality, age, ethnicity).  Responses are weighted to population totals.

Annual Survey of Hours and Earnings

The Annual Survey of Hours and Earnings (ASHE) is a sample taken from the PAYE system and provides the most reliable data on earnings for UK employees, however, it has limited demographic information.

3.2 Method

Employment estimates

The majority of the data processing is done by ONS, with DCMS receiving cleaned and weighted respondent-level data. We then process the data to give estimates for employment.

To produce our employment estimates we remove any respondents who are not in work from the dataset for analysis. We define ‘in work’ as those with a first job who are an employee or self-employed and those who have a second job who are employees, self-employed or have otherwise not stated.

As we estimate employment as the number of filled jobs, we restructure the data to be on a per job basis, rather than a respondent basis. We then select entries that are relevant for a particular measure (e.g. all entries with a SIC code of 85.52 for total employment in Cultural Education) and aggregate over the associated population weights to generate an estimate of the total filled jobs.

Earnings estimates

The ONS definition of earnings is the payment received by employees in return for employment. Most analyses of earnings consider only gross earnings, which is earnings before any deductions are made for taxes (including National Insurance contribution), pensions contributions, student loan deductions, and before payment of benefits. Further information is available from the ONS publication: A guide to sources of data on income and earnings.

The data tables derived from the ASHE use three different measures of earnings. The filters used are consistent with ONS analysis:

• The weekly filter is employees on adult rates whose earnings for the pay period were not affected by absence. Additionally, employees who do not have a valid work region and who are less than 16 years old are filtered out because the age and region variables are required for weighting.
• The annual filter is employees on adult rates who have been in the same job for more than one year. Additionally, employees who do not have a valid work region and who are less than 16 years old are filtered out. Employees with missing or zero annual gross salaries are also filtered out.
• Hourly pay excluding overtime is used to calculate the Gender Pay Gap (GPG), and uses the same filters as weekly pay.

The headline statistics for ASHE are based on the median rather than the mean. The median is the value below which 50% of employees fall. It is ONS’s preferred measure of average earnings as it is less affected by a relatively small number of very high earners and the skewed distribution of earnings, so provides a better indication of typical pay than the mean.

Limitations

The ASHE data used for this analysis are robust and have a number of strengths:

• Size and coverage - the ASHE dataset contains information on approximately 180,000 jobs in all industries, occupations and regions, making it the most comprehensive source of earnings information in the UK and enabling a vast range of analyses.
• Quality - alternative sources of earnings information such as the APS rely on self-report or proxy data, which are known to be less reliable than information from employers’ administrative systems.

but there are some limitations of which users should be aware:

• Due to data collection difficulties during the 2020 COVID-19 pandemic, the sample achieved in the 2020 ASHE was about 25% smaller than usual, at 136,000 jobs.
• Analyses presented here have been calculated on a consistent basis in DCMS. Due to minimal differences in the methodology and analysis used to calculate the median, results in this report may not match the ONS published results, in particular when looking at further breakdowns to some data e.g. by region or age. These differences are small but should be treated with caution.
• Lack of personal demographic information - characteristics such as ethnicity, religion, education, disability and pregnancy are not recorded in the ASHE dataset. 
• The quality of estimates at low levels of disaggregation can be poor.
• The dataset does not cover those who are self-employed or not within the PAYE scheme, meaning that lower-paying jobs may be excluded.

A fuller description of the strengths and limitations of the Annual Survey of Hours and Earnings (ASHE) can be found in the Quality and Methodology Information report and the Guide to sources of data of earnings and income.

Disclosure control

As part of the production process, we also apply disclosure control measures to prevent the identification of any respondents. We suppress values where the number of respondents for a cell is below a set threshold. Where appropriate, we also apply secondary suppression to prevent disclosure via differencing.

3.3 Changes in this release

Typically, digital sector estimates based on the APS include a variety of demographic breakdowns, including age, sex, region of work, nationality, ethnicity, disability, highest qualification and occupation grouping. 

Estimates for the number of filled jobs by the highest level of education for the period October 2022 to September 2023 are based on a new variable in the underlying Annual Population Survey (APS) dataset. From January 2022 to March 2022 new qualifications have been added to the survey after a review identifying gaps in the Labour Force Survey (LFS) questionnaire at the ONS. Because of this we advise caution when making comparisons to equivalent estimates covering time periods prior to January 2022.

No changes have been made to the earnings release.

4. Quality assurance processes

This document summarises the quality assurance processes applied during the production of these statistics by our data providers, the Office for National Statistics (ONS), as well as those applied by DCMS.

4.1 Quality assurance processes at ONS

Quality assurance at ONS takes place at a number of stages. The various stages and the processes in place to ensure quality for the data sources are outlined below. It is worth noting that information presented here on data sources are taken from the Annual Population Survey (QMI) and the ASHE quality information report. This work should be credited to colleagues at the ONS.

4.2 ONS Annual Population Survey

The purpose of the APS is to provide information on important social and socio-economic variables at local levels. The APS is not a stand-alone survey but uses data from the Labour Force Survey (LFS) and a local sample boost.

4.2.1 Sample design

The APS survey year is divided into quarters of 13 weeks. From January 2006, it has been conducted on the basis of calendar quarters: January to March (Quarter 1), April to June (Quarter 2), July to September (Quarter 3) and October to December (Quarter 4). The APS design is not stratified.

The APS data set is created by taking waves 1 and 5 from four successive quarters, with rolling-year data from the English, Welsh and Scottish Local Labour Force Survey, to obtain an annually representative sample of around 80,000 households. Over the period of the 4 quarters, waves 1 and 5 will never contain the same households to avoid the inclusion of responses from any household more than once in the dataset.

4.2.2 Sampling frame

The sampling frame for the survey in Great Britain is the Royal Mail Postcode Address File (PAF) and the National Health Service (NHS) communal accommodation list. Due to the very low population density in the far north of Scotland (north of the Caledonian Canal), telephone directories are used as sampling frames. A systematic sample is drawn each quarter from these three sampling bases, and as the PAF is broken down geographically, the systematic sampling ensures that the sample is representative at the regional level. In Northern Ireland, the Rating and Valuation Lists (which serve for the administration of land taxes) are used.

4.2.3 Data collection

Interviews in all waves are carried out either on a face-to-face basis with the help of laptops, known as Computer Assisted Personal Interviews (CAPI) or on the telephone, known as Computer Assisted Telephone Interviews (CATI). Information is collected using a software package called Blaise.

4.2.4 Validation and quality assurance

• Accuracy is the degree of closeness between an estimate and the true value. As both surveys are sample surveys, they provide estimates of population characteristics rather than exact measures. At ONS, confidence intervals are used to present the sampling variability of the survey. For example, with a 95% confidence interval, it is expected that in 95% of survey samples, the resulting confidence interval will contain the true value that would be obtained by surveying the whole population.

• Comparability is the degree to which data can be compared over time and domain, coherence is the degree to which data are derived from different sources or methods but refer to the same topic and are similar. Some sources provide data that overlap with APS/LFS data on employment, unemployment and earnings. More information on these sources is available in the Annual Population Survey (APS) QMI.

• Statistical disclosure control methodology is also applied to the datasets before release. This ensures that information attributable to an individual is not disclosed.

• On each quarterly LFS dataset, the variable frequencies are compared with the previous period. This identifies any significant discontinuities at an early stage. All discontinuities judged significant are investigated to determine the reason for the discontinuity. Is it the product of questionnaire revision or processing error, derived variable revision or error or real-world change? This process also ensures that the metadata associated with each variable is correct.

• Specific main derived variables are checked in detail by extracting the underlying variables and recalculating in another application, then comparing the results with the values in the dataset. This ensures that the program used to calculate the derived variables is working correctly.

4.3 Annual Survey of Hours and Earnings

The Annual Survey of Hours and Earnings (ASHE) is a sample taken from the PAYE system and provides the most reliable data on earnings for UK employees, however, it has limited demographic information.

4.3.1 Sampling and data collection

ASHE is based on a 1% sample of employee jobs taken from HM Revenue and Customs (HMRC) Pay As You Earn (PAYE) records. The sample is matched against the ONS’ Inter-Departmental Business Register (IDBR) in order to obtain contact and address details for the employers. Information on the hours paid and earnings of employees is obtained from employers and treated confidentially. Please note that ASHE does not cover the self-employed, nor does it cover employees not paid during the reference period.

A specific date in April is chosen so that all respondents refer to the same point in time. This reference date is not the same every year. Given the survey reference date in April, the survey does not fully cover certain types of seasonal work, for example, employees taken on for only summer or winter work.

The ASHE dataset contains information on approximately 180,000 jobs in all industries, occupations and regions, making it the most comprehensive source of earnings information in the UK and enabling a vast range of analyses.

4.3.2 Validation and quality assurance

• Accuracy is the degree of closeness between an estimate and the true value. As the survey is a sample survey, it provides estimates of population characteristics rather than exact measures. At ONS, coefficients of variation (cv) are published alongside ASHE outputs to present the sampling variability of the survey. 

*The ONS applies imputation and weighting to compensate for missing values and low responses. More information is available in the Annual Survey of Hours and Earnings QMI

*Various procedures are in place to minimise errors in returned data. Returns undergo a range of checks that include validation against previous returns and expected values, selective editing (a technique for prioritising suspicious values for follow-up based on their impact on published results) and re-contacting businesses for verification. Similar checks are also made at the aggregate level for main results.

4.4 Quality assurance processes at DCMS

The majority of quality assurance of the data underpinning this digital sector Economic Estimates release takes place at ONS, through the processes described above. However, further quality assurance checks are carried out within DCMS at various stages.

Production of the report is typically carried out by one member of staff, whilst quality assurance is completed by at least one other, to ensure an independent evaluation of the work.

4.5 Data requirements

For both the APS and ASHE data, DCMS discusses its data requirements with ONS and these are formalised as a Data Access Agreement (DAA). The DAA covers which data are required, the purpose of the data, and the conditions under which ONS provide the data. Discussions of requirements and purpose with ONS improve the understanding of the data at DCMS, helping us to ensure we receive the correct data and use it appropriately.

The DAA covers which data are required, the purpose for accessing the data, and the conditions under which ONS provide the data. Discussions of requirements and purpose with ONS improved the understanding of the data at DCMS, helping us to ensure we receive the correct data and use it appropriately.

4.6 Production and data analysis

At the production stage, the data is aggregated up to produce information about the digital sector and sub-sectors before inputting the data into the formal data tables ready for analysis. Disclosure control is also applied as part of this process.

The statistical lead ensures a number of quality assurance checks are undertaken during this process. Where relevant these checks typically include:

• whether disaggregations sum to the overall total. E.g:

   * Do sub-sectors within the creative industries sum to the creative industries total?

   * Do the individual regional breakdowns sum up to the total for that sector?

• “Sense checks” of the data. E.g.:

   * Are the estimates similar from one year to the next? How do the figures compare with ONS published totals?

   * Looking at any large differences between the data and possible causes to these.

• Checking that the correct SIC codes have been aggregated together to form the digital sector (and sub-sector) estimates. Are all SIC codes we require included? Are there any non-digital SIC codes that have been included by accident?

• Checking it is not possible to derive disclosive data from the figures that will be published.

• Making sure the correct data has been pasted to the final tables for publication, is accessible, formatted correctly, and has appropriate documentation.

• Having checked the quality of the data, analysis is then conducted to outline the key trends and patterns. This is then checked to ensure all statements, figures and charts are correct.

4.7 Dissemination

Finalised figures are published as OpenDocument spreadsheets on GOV.UK, with summary text on the webpage. These are produced by the workforce statistics lead who, beforehand, checks with the ONS on details of how to interpret the statistics. Before publishing, a quality assurer checks the figures match between the tables and the GOV.UK page summary. The quality assurer also makes sure any statements made about the figures (e.g. regarding trends) are correct according to the analysis and checks spelling or grammar errors.

4.8 Post publication

Once the publication is released, DCMS reviews the processes and procedures followed via a wash up meeting. This occurs usually a week after the publication release date and discusses:

• What went well and what issues were encountered
• What improvements can be made for next time
• Engaging with users of the publication to get feedback

5. External data sources

It is recognised that there are always different ways to define sectors, but their relevance depends on what they are needed for. The government generally favours classification systems which are

• rigorously measured,

• internationally comparable,

• nationally consistent, and

• ideally applicable to specific policy interventions.

These are the main reasons for constructing sector classifications from Standard Industrial Classification (SIC) codes. However, we accept that there are limitations with this approach and alternative definitions can be useful where a policy-relevant grouping of businesses crosses existing Standard Industrial Classification (SIC) codes.

We are aware of other estimates relevant to the digital sector. These estimates use various methods and data sources and can be useful for serving several purposes, e.g. monitoring progress under specific policy themes such as community health or the environment, or measuring activities subsumed across a range of SICs.

The ONS use the quarterly Labour Force Survey for their estimates of UK-wide employment rates. Our APS employment estimates of the number of filled jobs in the digital sector takes a similar approach. However, as the APS uses two waves of the LFS, the datasets are not directly comparable and the ONS published figures will differ slightly from ours.

For employment statistics more broadly, the main alternative is the Business Register and Employment Survey (BRES). This has the advantage of asking businesses directly about their employees and hence is likely to capture the sector of employees more accurately than a household survey. However, it does not contain the range of demographic breakdowns that the APS does, which enables us to build a fuller picture of employment in our sectors, using a still-robust data source, and does not include the self-employed.

It is recognised that there will be other sources of evidence from industry bodies, for example, which have not been included above. We encourage statistics producers within the digital sector who have not been referenced to contact the economic estimates team at evidence@dcms.gov.uk.

6. Further information

For enquiries on this release, please email evidence@dcms.gov.uk.

For general enquiries contact:

Department for Culture, Media and Sport

100 Parliament Street London

SW1A 2BQ

Telephone: 020 7211 6000

DCMS statisticians can be followed on X via @DCMSInsight.

Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to. You are welcome to contact us directly with any comments about how we meet these standards. Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.