What is Industrial-Organizational (IO) Psychology?

Industrial-organizational (IO) psychology, sometimes abbreviated as I-O or I/O psychology, is the study and application of psychological concepts and practices to an organization and its workforce. In practical terms, that means industrial-organizational psychologists help companies maximize their efficiency by improving hiring and promotion strategies, training and development, employee motivation programs and much more.

“I would say it is using scientific study to look at employee-employer relationships as they relate to productivity, morale, engagement, job satisfaction and attitudes,” said Dr. Thomas MacCarty, associate dean of psychology programs at Southern New Hampshire University (SNHU). MacCarty holds a PhD in I/O Psychology, and he has more than a decade of professional experience in higher education.

Essentially, industrial-organizational psychologists can help businesses recruit and hire the right people, help create training and development programs to improve employee performance and develop incentives and organizational structures, so employees are happier and more productive on the job and maintain work-life balance.

What Does an IO Psychologist Do?

IO psychologists focus on employee and leadership behavior and how it impacts the overall effectiveness of an organization, according to Dr. Cindy Alexander, an adjunct instructor of SNHU's graduate psychology program with a PhD in Psychology and over 30 years of experience working in education.

She said roles in IO psychology often include:

• Assessing performance
• Conducting research
• Developing training programs
• Evaluating and communicating data

"The value of learning more about behavior in the workplace — from what motivates employees, to the psychology of leadership behavior, to how to evaluate that behavior and apply practical solutions to improve productivity — is immeasurable," Alexander said.

Someone trained in industrial-organizational psychology can have an impact on nearly every part of an organization.

“There really is no part of the workplace that is not focused on,” MacCarty said. “If there is any issue that may be hampering an organization from moving forward, an IOP can help alleviate the issue, or at least mitigate it.”

To have such a broad impact, IOPs use psychological principles in their everyday work, MacCarty said. To develop training programs, an IOP uses their understanding of cognition and learning, interpersonal relationships and the impact of employees’ prior learning.

MacCarty offered an example of a company whose revenues dipped and had to eliminate annual raises, causing a productivity decline and financial hardships for some employees. An IOP can assess that climate and develop other incentives to employees, such as flex-time programs, recognition awards or 4-day work week schedules.

“An IOP can look at the situation and come up with some concrete ideas, ways to improve employee motivation and overcome the disappointment felt by employees because they did not get raises," he said.

What Are Some Major Topics in Industrial-Organizational Psychology?

In addition to universally applicable knowledge about psychological theories and principles, The Society for Industrial and Organizational Psychology (SIOP) identified several key focuses for industrial-organizational psychologists (IOPs). Some of these areas include:

• Career Development – Recruiting candidates that best fit positions in an organization and create training and career-planning programs that nurture employee development.
• Leadership and Management - Studying the qualities of effective leadership at an organizational, team and individual level as they relate to motivation, decision-making, interpersonal communication and more.
• Organization Theory and Development - Understanding the structure, design and culture of an organization as well as change management and how to identify and intervene in organizational issues.
• Performance Management – Designing job performance measurement systems to evaluate and improve employee performance.

"Employers today are faced with many unique and constantly evolving challenges," Alexander said. She noted that studying IO psychology can help you find solutions.
According to Alexander and McCarty, while studying IO psychology you'll also learn about:

• Change management
• Consulting and recruiting
• Data-driven decision making
• Ethical standards in the workplace
• Workplace behavior, motivation and cultural influence

Learn more about change management.

What Jobs Can You Get With an I-O Psychology Degree?

"Degrees in this field are applicable to many professions and industries, with titles that may not be labeled as ‘IO psychologist," Alexander said.

For example, she said she's seen graduates of SNHU's master's in psychology with a concentration in organizational psychology go start roles in human resources, especially those related to organizational development, training and recruiting.

"Others use this degree to build on their existing experience in leadership roles with credentials focused on human behavior, and many go on to consult for various organizations, both internally and externally," she said.

You might not have worked at a company that employed an IOP, but it’s possible you’ve had co-workers trained in industrial-organizational psychology who simply have another job title. Industrial-organizational psychology doesn’t exactly roll off the tongue, but companies still rely on the expertise of IOPs. IOPs work in many sectors, according to SIOP, including:

• Academia
• Consulting
• Government
• Industry

The U.S. Bureau of Labor Statistics (BLS) reported in 2023  industrial-organizational psychologists earned a median income of about $147,420 in 2023, and through 2033 the field is expected to grow by 6%.*

How to Become an Industrial-Organizational Psychologist

The first step to becoming an industrial-organizational psychologist is to earn a bachelor’s degree in a related subject, like a bachelor's psychology with an industrial-organizational psychology concentration — sometimes known as a business psychology degree.

With the help of this type of degree concentration, MacCarty said you can consider job titles such as:

• Human resources coordinator
• I-O psychologist assistant
• Retention specialist
• Training and development coordinator
• Workplace behavior analyst

You might also consider pairing your degree with a minor or electives in a field or industry that interests you, such as accounting or healthcare administration.

If your goal is to hold the title of industrial-organizational psychologist, a master's degree is typically required, BLS reported.

"The minimum requirement to be called an I/O psychologist is a master's degree in industrial-organizational psychology or a closely related field is often required," MacCarty said. Some states also require licensing or certification, he said. 

Jackie Lancaster '21G held a bachelor's in industrial-organizational psychology but knew she would need a master's degree if she wanted to unlock new opportunities in her field. And it paid off.

"My program was worth every minute I spent working to obtain my degree," said Lancaster. "It has opened new avenues that I was not able to explore before."

Gaining a master's degree in industrial-organizational psychology gave Lancaster the tools she needed to feel more confident in her work.

"I learned more than I ever thought I could and I feel as if I received a great education that pertained to what I wanted and needed," she said. "I feel as if I can speak the language of my profession proficiently, and I have gained a tremendous amount of self-esteem over the process."

*Cited job growth projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Actual salaries and/or earning potential may be the result of a combination of factors including, but not limited to: years of experience, industry of employment, geographic location, and worker skill.

Joe Cote is a writer and organic marketer at Southern New Hampshire University (SNHU), where he has worked since 2016. Previously he spent more than a dozen years as a reporter and editor at weekly and daily newspapers in Vermont and New Hampshire. He lives near SNHU's Manchester, New Hampshire campus with his wife and daughter. Connect with him on LinkedIn.