What is Industrial Organizational Psychology?

Industrial Organizational Psychology (IO Psychology, or Organizational Psychology) is one of the fastest growing occupations in the US. This article intends to explain what this career field entails (such as what IO Psychologists do), and answer frequently asked questions.

Industrial Organizational Psychology is the intersection between psychology and business. According to the American Psychological Association:

The specialty of industrial-organizational psychology (also called I/O psychology) is characterized by the scientific study of human behavior in organizations and the work place. The specialty focuses on deriving principles of individual, group and organizational behavior and applying this knowledge to the solution of problems at work.

American Psychological Association

The underlying purposes of the discipline are two-fold: to improve the institution (such as improving profitability or productivity), and to create a better workplace (such as improving employee satisfaction).

In what industries do Industrial Organizational Psychologists work?

Industrial Organizational Psychologists can potentially work for companies, in house, or work on a self-employed, contract basis. The entities for which IO Psychologists may work include for-profit private companies, not-for-profit organizations, public and governmental agencies, and educational institutions. There are almost no enterprises or institutions which cannot, in principle, benefit from Industrial Organizational Psychology.

This is done by using psychological principles applied to individuals and groups within the organization.

Industrial Organizational Psychology | Frequently Asked Questions

1. What does an industrial and organizational psychologist do?

An I/O Psychologist uses psychological practices to improve institutions, in ways including company profitability, worker conditions and satisfaction, and productivity. This is done by using the means and principles of psychology to understand individual and group dynamics and how they interplay in the workflow of the entity.

2. What is an example of industrial/organizational psychology?

An example of industrial organizational psychology at work would be evaluating the hiring practices, so that turnover is less and applicants are evaluated for who is better suited to the working environment before they are hired. This is actually very valuable to employers, as it reduces the applicants to the most qualified (whether that be by temperament, by cohesion with others, etc.), and reduces turnover which in turn reduces the costs of training new employees.

3. Do you need a PhD to be an industrial/organizational psychologist?

No, most commonly a master’s in Industrial Organizational Psychology is sufficient for employment. In certain circumstances a bachelor’s degree will suffice for employment. The PhD in Industrial Organizational Psychology does set a person apart and makes them more qualified. The PhD graduate can qualify for positions not always available to the master’s graduate, such as research, publishing, and tenured-track professorships at universities.

4. Is industrial psychology in demand?

The Bureau of Labor Statistics puts the growth rate for Psychologists at 3% between now and 2029. This means an increase of 5,700 jobs between now and 2029. Not all of these positions will be for Industrial Organizational Psychologists, however. Applying the 3% increase to the total number of IO Psychologists (780) will mean an increase of 23.4 new jobs (though the 780 current IO Psychologists doesn’t include those who are self-employed).

5. How much do Organizational psychologists earn?

Organizational psychologists’ median salary was $112,690.00 in 2020, with an hourly wage of $54.18. The range was between $57,440 for the lowest 10% of salaries, to $192,800 for the upper 90% of the highest earners.

6. Is Industrial Psychology hard?

This is a subjective question and difficult to answer, given that different people have different capabilities and proficiencies. It’s perhaps an easier career for those who have good organizational skills and enjoy working with people and businesses towards a common goal.

For students, a Master’s in Organizational Psychology will likely be the necessary minimum degree requirement.

A necessary skill will involve the ability to understand businesses and how they’re structured, and the ability to understand and apply psychological techniques. The graduate degree will teach the business structures and how to go about the application of psychology to them.

7. Is IO psychology a good career?

IO Psychology is a good career for those who value salary potential and the flexibility of working independently. Given the relatively new career field, the growth rate is high as well, meaning that companies are interested in hiring IO Psychologists. This translates to career stability, which also makes this career field a good choice.

IO Psychology is a good career if what’s important to you are being in the higher salary range for psychology careers, and the growth rates across time. The growth rate is 3% for Psychologists, adding an additional 5,700 jobs between now and 2029.

Percentile10%25%50%75%90%
Hourly Wage$27.61$33.55$46.28$66.32$92.69
Annual Wage$57,440.00$69,780.00$96,270.00$137,930.00$192,800.00
Source: The Bureau of Labor Statistics

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