What Is I-O Psychology?
| Brit Brogaard Modified on April 25, 2022
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Psychology engages in scientific study of the mind and its functions. An applied subfield, industrial-organizational (I-O) psychology uses psychological principles and methods to address workplace issues.
Corporate I-O psychologists typically work in tandem with human resources, research and development, and marketing teams. Focus areas for these professionals often include labor relations, conflict resolution, and personnel recruitment, training, and assessment. Many I-O psychologists find employment in industries such as postsecondary education, consulting, and state and local government.
Earning an industrial-organizational psychology degree can pave the way to lucrative careers across diverse industries. The Bureau of Labor Statistics (BLS) reports an average annual salary of $150,910 for I-O psychologists employed in research and development and $104,470 for those working in postsecondary education as of May 2020.
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What Does an I-O Psychologist Do?
When industrial-organizational psychology first arose as a discipline, most psychologists held academic posts. Psychologists who worked outside of academia typically did so as part-time consultants. In the early twentieth century, only about 5% of American Psychological Association (APA) members worked primarily in applied settings.
Many I-O psychologists still pursue academic careers today. However, most industrial-organizational psychology graduates conduct applied professional psychology in corporate workplaces as either full-time employees or consultants.
Applied — or professional — I-O psychologists improve workplace productivity, evaluate leadership styles, assess employee satisfaction, and resolve workplace conflicts. These professionals rely on a variety of tools and strategies, including questionnaires, observational methods, interviews, mediation, educational workshops, and policy changes.
I-O psychologists in academic positions typically teach classes, supervise students, perform administrative duties, and conduct scientific research. Popular research areas include employee motivation, leadership styles, and the changing nature of careers.
Industrial-organizational psychology may appeal to both experienced HR specialists seeking career advancement and budding professional and academic I-O psychologists. Individuals attracted to this discipline tend to possess strong analytical abilities, interpersonal skills, and research expertise.
Day in the Life of an I-O Psychologist
I-O psychologists perform a variety of job duties. Routine responsibilities include recruiting and training new hires, assessing and analyzing employee performance and satisfaction, implementing workspace and policy improvements, and conducting consumer research to improve marketing strategies.
During a typical workday, an I-O psychologist might administer a personality test to job candidates in the morning, then mediate a dispute between coworkers before lunch. In the early afternoon, they may advise company leaders on negotiating a potential merger. The day might conclude with an employee workshop on recognizing and speaking out against microaggression.
In addition to managing routine responsibilities, I-O psychologists must also respond to unforeseen contingencies. For example, an I-O psychologist may need to address low employee morale resulting from a hostile workplace environment or a company manager's inefficient leadership style.
We provide further details about five key responsibilities for this position below.
I-O Psychologists' Main Responsibilities
- Personnel Selection: Design assessment tools for recruitment purposes, analyze findings, and present results to management or professional recruiters. Tests may address factors such as employee workstyle, work ethics, and personality.
- Management Assessment: Design and administer leadership style tests to identify inefficient management practices which can lead to miscommunication, lowered employee morale, employee burnout, and decreased organizational productivity.
- Employee Training and Education: Develop informational and training materials to educate employees on company policies, organizational changes, foreign influence, conflicts of interest, workplace discrimination, and workplace harassment.
- Hostile Work Environment Intervention: Design interventions to stop workplace bullying, mitigate factors leading to burnout, and help managers develop successful leadership styles. Measure these interventions' effect on job satisfaction, employee motivation, work performance, and organizational success.
- Customer Behavior Studies: Assess customer satisfaction and conduct studies about why people purchase goods or services, then present findings to marketing managers.
Career Spotlight: Valerie Sessa, Professor of Industrial and Organizational Psychology
Valerie Sessa is a tenured Professor of Industrial and Organizational Psychology in the Department of Psychology at Montclair State University. Prior to Montclair, she worked as a research scientist and director at the Center for Creative Leadership (CCL). During her tenure at CCL as the director of executive selection, she managed a start-up operation designed to provide cutting-edge research and knowledge on executive selection to the academic and business communities.
Valerie has also worked as a consultant, most recently using behavioral assessment centers. Her consulting activities include Ciba-Geigy Pharmaceuticals, New York Hospital System, Citibank, Bellevue Medical Center, and Xerox.
This is a bit of a long story. In sixth grade, I knew I wanted to be a research psychologist (my father is a research chemist, so I knew that was possible). I wanted to be a parapsychologist and study things like extrasensory perception, otherwise known as ESP. I read books on the topic and my parents encouraged me. I had the goal of going to Duke University because they had a parapsychology laboratory. In high school, however, Duke removed the lab and I couldn't find any other psychology program that had this option. I sort of got the clue that maybe parapsychology was not going to be an option. I still wanted psychology; I didn't want clinical, but didn't know exactly what I wanted. My mom had heard about Industrial and Organizational (I-O) Psychology. Then, my dad was dating someone whose ex was an I-O psychologist, so I looked into it (and talked to the ex) and thought that sounded interesting.
In my case, as I wanted to do research, I needed to have a Ph.D. What is really wonderful about I-O psychology, though, is that unlike most fields of psychology, you only need a master's to use your degree. Most people work in organizations, for the government, or as a consultant — for those lines of work, you can at least start off with a master's degree. You can go back later to get your Ph.D. if you decide you need it.
The classes prepared me with knowledge about I-O. I also learned which topics I liked and wanted to pursue more on my own and which topics weren't as interesting to me.
I did research, published, and taught courses as an adjunct instructor while earning my Ph.D. I also did a year-long formal internship, then a year-long internship on my own (as well as a few summer internships), and a few consulting gigs. These internships/consulting also helped me pay for my education.
During graduate school, I found out about research institutions, so I did a combined job search. I applied for academic jobs, but I also applied to a place called The Center for Creative Leadership — that was my dream job. They turned me down! I applied again and they brought me on even though they didn't have a job opening. I was there for nine years and loved every day of it. I left that job as I was planning to get married and needed to move. At that point, I applied for academic positions and was hired by Montclair State University.
I love doing research. In addition, I love working with aspiring I-O psychology students to help them prepare for their own careers.
A positive challenge is that knowledge and skills continue to change. You need to stay on top of literature (better yet, as a researcher, you need to provide the new literature!). You need to stay on top of the technology, too. So you need to learn continuously to stay in place.
I know some students don't really know what I-O is before they enter into it. They are attracted because they hear that you can make a lot of money in this field (which you can). But if you are not interested and you just want the money, this is not the field for you. You will have a hard time being engaged and will probably burn out. Do your research and make sure this is the field for you. Don't be swayed by the money.
I do not have a typical day, it is more like a typical week. I teach three classes, but that isn't just booting up my Zoom and teaching. You have to prepare for the class, work one-on-one with students, and grade. So three classes actually take up most of my time. I also work with students on four separate research projects, so I have weekly meetings with them as well. In some projects we are collecting data, in some projects we are analyzing, and in some projects we are writing. I also do service and serve on committees within the University and within my profession. For example, someone has to peer review and critique all those journal articles that get published. I serve on review boards, and also serve as a reviewer for a number of journals.
Internal motivation. Like I said, there is continuous change in this field, so knowing an area or knowing a skill is not enough. You need to be willing to continuously learn and update. The information I learned in school is now "ancient history" to my students today.
Do your due diligence. Explore, read, talk to people, and make sure that this is right for you. If it is, then go for it.
Areas of Expertise in I-O Psychology
Consulting I-O psychologists determine how to implement workplace reform by investigating factors such as employee satisfaction, company culture, training gaps, group dynamics, job assessments, and ergonomics.
We broke down consultants' four primary specializations to provide a clearer picture of their professional responsibilities.
Talent development specialists design programs to help employees build essential job success skills.
Examples of Company Issues Addressed
- Disparate training strategies
- Lack of motivation or direction
- Inaccurate job assessment techniques
Consultants develop skills review procedures based on value and competency frameworks. With this overview, they identify employee education gaps and craft effective strategies to overcome them.
Common Job Titles
- Talent manager
- Workforce insight specialist
- Professional development leader
Professionals in this area specialize in determining not only the type of person best for a role, but how to locate and hire desirable candidates.
Examples of Company Issues Addressed
- High employee turnover
- Recruitment difficulties
- Low employee satisfaction
Similar to talent development consultants, these individuals identify the skills needed for a position through job analysis. After assessing the necessary competencies, they design pre-employment screenings and create unique interview processes designed to identify well-suited candidates.
Common Job Titles
- HR practice leader
- Talent management specialist
- Employment testing professional
Performance management involves developing and implementing employee assessment techniques.
Examples of Company Struggles
- Employee apathy
- Inaccurate employee evaluation metrics
- Organizational underperformance
An I-O psychologist consulting in this area determines critical position skills, establishes company goals through internal interviews, and develops review and commendation processes reflecting their findings.
Common Job Titles
- HR organizational development specialist
- Testing programs supervisor
- Behavioral analyst
Professionals consulting in this arena analyze a company's efficiency, productivity, and profitability.
Issues Consultants Help With
- Major mergers
- Problematic corporate culture
- Rapid expansion
Organizational development specialists use an array of tools, including mediation, competency models, and candidate assessment to identify and resolve corporate issues.
Common Job Titles
- Industrial relations specialist
- Organization effectiveness consultant
- Optimization advisor
I-O Psychology Salary Overview
The BLS reports a median annual salary of $82,180 and a median hourly wage of $39.51 for I-O psychologists as of 2020 — significantly higher than the national median for all occupations.
Many factors, such as industry, can affect potential salaries in the field. According to the BLS, I-O psychologists in scientific research and development services earn the highest average salaries, followed by those employed at colleges, universities, and professional schools.
Highest degree earned and experience level also affect income. Ph.D.-educated I-O psychologists typically earn more than those with a master's or a bachelor's. However, for HR positions, work experience can often make up for lack of education.
Certification from the Society for Human Resources Management (SHRM) or the American Board of Organizational and Business Consulting Psychology (ABOBCP) may also influence earnings potential. SHRM does not require applicants with substantial work experience to hold a degree in the field. ABOBCP, in contrast, requires a Ph.D. and two years of work experience in three of 11 practice areas.
Where Can I Work as an I-O Psychologist?
Careers in I-O psychology provide opportunities across diverse industry sectors and geographic locations. Both location and job sector can affect careers and personal lives. Location, for instance, affects living expenses and lifestyle, while the job sector influences position availability and advancement opportunities.
Job location can affect an I-O psychologist's career. For example, professionals working in Miami, Florida face a significantly higher cost of living than in the state's largely rural panhandle. However, while more expensive, living in Miami may prove more attractive to individuals who prefer urban amenities.
Location can also affect job concentration, which in turn influences demand. According to the BLS, 3 out of every 100,000 employees work in I-O psychology in Virginia, whereas only 1 out of every 100,000 employees in California work in I-O psychology.
The BLS reports an average annual salary of $119,100 for I-O psychologists working in California but $64,820 for those in Texas as of 2020. The table below provides further data on variations in average I-O psychologist salaries across different states.
Mean Wages by State for I-O Psychologists, 2020
|Top-Paying States||Hourly Mean Wage||Annual Mean Wage|
The industry in which an I-O psychologist works can also affect career aspects such as salary and job duties. The BLS reports an average annual salary of $112,020 for I-O psychologists employed in local government, excluding schools and hospitals, but $86,460 for those working comparable state government jobs.
I-O psychologists' responsibilities vary across other industries. Scientific research and development services experts study consumer behavior to improve marketing efforts, analyze employee satisfaction and productivity, and design personality tests for hiring purposes.
I-O psychologists in academic positions teach industrial-organizational psychology courses and conduct research. They also perform administrative and professional duties such as serving on university committees and editorial boards and reviewing submissions to peer-reviewed academic journals. The table below provides further data on salary variations for I-O psychologists across different industries.
Mean Wages by Industry for I-O Psychologists, 2020
|Top-Paying Industries||Hourly Mean Wage||Annual Mean Wage|
|Scientific Research and Development Services||$72.55||$150,910|
|Local Government, excluding schools and hospitals (OES Designation)||$53.86||$112,020|
|Colleges, Universities, and Professional Schools||$50.22||$104,470|
|Management, Scientific, and Technical Consulting Services||$47.52||$98,840|
|State Government, excluding schools and hospitals (OES Designation)||$41.57||$86,460|
I-O Psychologist Upward Mobility
Earning a master's or Ph.D. in industrial-organizational psychology can lead to leadership positions in human resources, compensation and benefits, or marketing. Below, we describe some of these advancement opportunities for I-O psychology graduates.
Human resources managers direct activities such as labor relations, conflict resolution, recruitment, and training. Typical responsibilities include handling employee grievances, overseeing recruitment, and supervising HR staff.
Comparison to I-O Psychology: An HR manager's job functions differ from those of an I-O psychologist working in HR. HR managers focus on managing their departments, whereas I-O psychologists concentrate on specific HR-related tasks.
Additional Training or Certification: SHRM certification preferred
Time in the I-O Psychology Role: 1-7 years
Average Annual Salary: $134,580
Compensation and benefits managers oversee an organization's remuneration programs. Typical job duties include managing salary and benefits packages, ensuring regulatory compliance, and assessing remuneration programs' competitiveness.
Comparison to I-O Psychology: Compensation and benefits managers focus on departmentmental management rather than on specific tasks such as research, assessment, and training.
Certification: SHRM, International Foundation of Employee Benefit Plans, or WorldatWork certification preferred
Time in the I-O Psychology Role: At least five years
Average Annual Salary: $137,160
Marketing managers promote interest in an organization's products or services. Typical responsibilities include overseeing consumer behavior and market research, planning and scheduling marketing campaigns, and strategizing pricing of products and services.
Comparison to I-O Psychology: Whereas I-O psychologists focus on consumer behavior studies, marketing managers direct these and other marketing activities.
Average Annual Salary: $154,470
I-O Psychology Organizations
Frequently Asked Questions About I-O Psychology
What are an I-O psychologist's duties?
I-O psychologists working in corporate settings may assess employee satisfaction and productivity, manage personnel selection, and conduct consumer behavior research.
What specializations can I-O psychologists have?
I-O psychologists can specialize in areas such as teaching, recruitment, performance management, compensation and benefits, organizational change, and consumer behavior analysis.
Where is an I-O psychologist's workplace?
Many I-O psychologists work in corporate departments such as human resources or marketing. Corporate consultants may be self-employed or work for a consulting firm. Academic I-O psychologists work in colleges, universities, and professional schools.
How much do I-O psychologists make?
The BLS reports a median annual salary of $82,180 for I-O psychologists across all industries as of 2020. Earnings depend on factors such as geographic location, industry sector, highest degree earned, and work experience.
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