A fast-growing segment of psychology is landing grads jobs in Corporate America

BY Sam BeckerDecember 29, 2022, 6:58 PM
Commuters arrive into the Oculus station and mall in Manhattan, as seen in November 2022 in New York City. (Photo by Spencer Platt/Getty Images)

For decades, researchers have extolled the benefits of investing in workers and employees—something that an increasing number of employers have started taking more seriously. The pandemic accelerated the trend, as millions of employees struggled with remote work, family obligations, health concerns, and more. People were and remain stressed and anxious—and that’s something that can affect their job performance and, ultimately, the bottom line for their employers.

As such, many employers have increased investments in their workforces, including adding new elements to benefits packages, adopting more flexible work arrangements and schedules, and in some cases, bringing in trained professionals to help improve overall morale and conditions. Such roles in industrial-organizational psychology focus on the intersection of business and psychology, and people in these roles typically hold a master’s degree in psychology with a concentration in this specialty.

The science of industrial-organizational psychology (often called “I-O” psychology) is not all about implementing lax dress codes, finding room in the budget for in-office ping-pong tables, or convincing management to cater lunch. Rather, these psychologists are focused more on employee well-being as a whole, which can help businesses retain talent, foster stronger and more dedicated employee ranks, and ultimately, save money that may otherwise be spent recruiting and competing for more workers.

I-O psychology, as a profession, is blossoming—and could be a ticket to a relatively well-paying and growing career field for psychology students.

‘Important and necessary work’

Industrial-organizational psychology isn’t exactly a new field, but it’s one that’s gaining a foothold in many industries, according to Tara Behrend, fellow and president-elect of the Society for Industrial and Organizational Psychology and an associate professor at Purdue University. 

“I-O psychology goes back about 110 years or so,” Behrend says. “The work was mostly done in universities, but became very influential in military settings. During the 1960s, I-O psych being utilized in professional settings really picked up steam,” she says, adding that the Civil Rights era brought concerns about fairness in job searches to the tops of workers’ minds.

The field of I-O psychology has expanded further since then. “We’re working on a huge range of issues, including employee stress and burnout, health and well-being, job satisfaction, training design, and evaluation,” Behrend says. What’s more, “a huge piece of the work” now involves developing leaders through executive coaching, which requires a solid foundation in the most advanced research methods, she adds.

Those advanced research methods, rooted in data and empirical, measurable evidence and conclusions, are helping I-O psychology find a more permanent role in corporate America. Many budget-conscious employers may have scoffed at the idea of hiring a psychologist to tend to their employees’ well-being in the past, but with a growing body of evidence and data suggesting that investments in human capital pay off, it’s become easier to convince business leaders that the costs are justified.

“There’s an increased recognition among employers and business owners that they can do better in the competitive marketplace if they focus on the psychology of the workplace,” says Dennis Stolle, senior director of applied psychology at the American Psychological Association

The increased focus on psychology in workplaces is even leading to the creation of entirely new roles within the corporate strata, Stolle says. “Over the last five years, we’ve seen the creation of new jobs—sometimes C-level positions—and they have titles that, a decade ago, nobody would have ever heard of, such as ‘chief people officer,’ or ‘director of talent management,’” he says. “The creation of these positions at high levels shows the level of recognition that there has been among corporate management that this is important and necessary work.”

As such, there’s been a growth in demand for I-O psychologists in recent years. The number of jobs for I-O psychologists is expected to grow in the coming years, and salaries are already pushing into the six figures, according to data from the Bureau of Labor Statistics. As of 2021, I-O psychologists earn a median salary of more than $105,000. 

How to become an I-O psychologist

With a growing demand for I-O psychologists across various industries, that’s also made this career path more attractive to some psychology students. After all, a career that involves helping businesses become more efficient, while also improving the lives of workers, is one that’s sure to scratch an itch for many professionals.

The main road to becoming an I-O psychologist involves earning an undergraduate psychology degree and then earning a master’s degree within the industrial-organizational psychology sub-discipline. There are programs at numerous colleges and universities in the U.S., and it’s likely that more will be designed and implemented as demand rises.

“Psychology is one of the most popular undergrad majors in the U.S. something like 100,000 students study psychology in pursuit of a B.A. in any given year,” says Stolle, adding that I-O-specific master’s degree programs are still relatively few and far between.

“It’s true that psychology is a popular major,” says Howard Tokunaga, Coordinator of the master’s program in I-O psychology at San Jose State University. “But we’re seeing a growing segment of graduates who don’t want to practice as clinicians or therapists, so I-O psychology can be a path for students who want to work [on a different track], rather than conduct therapy.”

The SJSU program typically produces more than a dozen graduates per year, and “by the time they graduate, 90% of them are in long-term or permanent positions, mostly in the private sector,” Tokunaga says. He adds that the program’s graduates are mostly happy with their decision to pursue I-O psychology, too, as they can “help people and make an impact on organizations.”

Like many other career paths, becoming an I-O psychologist requires some education and on-the-ground work experience, which most students can attain while in school. And given the growing appetite for I-O psychologists, it’s likely that graduates will be able to find a job soon after graduating. 

Perhaps most importantly, Tokunaga says, it’s a fulfilling career—not one that merely involves checking boxes on forms. There’s a holistic side to it, which puts graduates in touch with the human element in organizational settings, and which can lead to real, healthy, and lasting change for both workers and businesses.

“There’s a need for people who can come in, develop and conduct initiatives, systematically and empirically—[businesses] want people who have good ideas, techniques, and knowledge,” he says. “My alums are happy. They enjoy what they’re doing, and they feel fulfilled.”

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