Organizational Leadership vs Industrial Psychology: Career ROI

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Updated: March 15, 2024, Reading time: 7 minutes

Organizational Leadership vs Industrial Psychology - featured image

Skilled leaders are very important in running successful businesses. Without them, businesses will struggle to navigate challenges, capitalize on opportunities, and achieve sustainable growth. While a lot may suggest pursuing a business degree, perhaps an MBA, to develop leadership skills, others go the other way and pursue psychology-rooted leadership degrees. 

If you’ve been wanting to pursue Psychology degrees for business and other applications, your two best options include Organizational Leadership and Industrial Psychology. Both terms have overlapping goals: to understand and optimize human behavior and performance within organizations. However, they approach this goal from different perspectives and focus areas.

Organizational Leadership and Industrial Psychology have differences far beyond the surface. They differ in their primary focus, methodologies, and the specific outcomes they aim to achieve within the organizational context.

A Quick Look At the Differences Between Organizational Leadership and Industrial Psychology

An industrial psychologist’s job may seem a lot like that of Organizational Leadership, as both are employed by businesses to increase productivity across the board by concentrating on the smaller details that add up to the total.

A key distinction is that organizational leaders build leadership and management abilities, while industrial psychologists concentrate on employee motivation and satisfaction.

Organizational LeadershipIndustrial Psychology
Average Salaries: Higher-level roles$112,050$144,610
Benefits to ClientsHelps companies in leading teams toward achieving their objectivesHelps companies understand human behavior, optimizing productivity and improving well-being
License/s RequiredNoneMust pass the EPPP or Examination for Professional Practice in Psychology
Education RequiredMaster’s DegreeDoctorate Degree

What Does an Organizational Leader Do?

What Does an Organizational Leader Do - Image

More and more companies are realizing the importance of competent CEOs and business executives. As a result, those gearing up to hold significant positions in today’s workforce are increasingly interested in obtaining a leadership degree and studying Organizational Leadership.

Organizational Leadership is a management approach that involves setting strategic objectives for a company and creating benchmarks to measure progress toward those objectives. The role of organizational leaders includes examining how employee performance, empowerment, and training may boost work ethic and motivation and move the organization closer to its goal.

These leaders aim to blend superior management techniques with a thorough understanding of human psychology.

Effective Organizational Leadership entails more than just possessing strategic and compassionate qualities. Motivation, coordination, and direction are further aspects of Organizational Leadership.

Organizational Leadership: Education and Career Path

Organizational Leadership degrees strongly emphasize conflict management, diversity, and organizational innovation. It aims to create flexible leaders who swiftly adjust to shifting company requirements in various departments and industries. It focuses on three approaches: leader-focused, follower-focused, and contingency-focused.

While a bachelor’s degree is enough to launch a leadership career, some people find this level of education insufficient. This is why aspiring business leaders need to pursue a master’s degree. Some undergrads pursue a master’s in Organizational Leadership but mostly opt for an MBA focusing on Organizational Leadership.

An Organizational Leadership degree can lead to various career opportunities. A bachelor’s degree will qualify you for the following entry-level positions:

If you pursue an advanced degree, such as a master’s degree, you can open doors to higher-level positions, including:

Although not required, obtaining extra relevant certificates, such as a certificate in nonprofit management or a certificate in human resources management, can significantly improve your competitiveness and marketability within particular industries or specializations.

Organizational Leadership ROI: Education Cost and Salaries

Because you’d have to pursue a master’s degree, you should expect to dedicate another two to four years of studies in addition to your four-year bachelor’s program. If you were to pursue an MBA—the most commonly pursued master’s degree— you should expect to spend an average of $71,880.

Pursuing a Doctor of Organizational Leadership degree is your key to specialized corporate leadership and teaching roles.

Federal data project that between 2022 and 2032, the number of jobs in management will rise by 6%, creating an estimated 1.1 million new posts annually. ZipRecruiter reports that entry-level Organizational Leadership roles pay an average of $47,831 annually, while higher-level roles have an average annual pay of $112,050.

In conclusion, you can only expect a high ROI with an Organizational Leadership major if you pursue a master’s degree. Entry-level management occupations are known to be low-paying.

A career in Organizational Leadership is for you if:

A career in Organizational Leadership is NOT a great fit if:

What Does an Industrial Psychologist Do?

What Does an Industrial Psychologist Do - Image

First of all, Industrial Psychology is a specialized field that delves into understanding human behavior within organizational settings. Rooted in a high-level academic background in Psychology, aims to optimize the functioning of individuals and groups to enhance overall productivity and well-being.

Industrial psychologists can assist companies in identifying roles and skills, optimizing recruitment procedures, recommending ergonomic improvements, measuring performance levels, improving work life, and advising on organizational structure to enhance productivity.

They utilize various psychological principles and methodologies to conduct assessments, surveys, and interventions to improve employee morale and job engagement.

Industrial Psychology: Education and Career Path

Because of its specialized content, Industrial Psychology is commonly found in graduate-level degrees. The path to becoming an industrial psychologist starts with a Psychology major, either as a Bachelor of Arts or Bachelor of Social Sciences program. 

Upon earning an undergraduate degree, you must pursue a Master’s in Industrial/Organizational Psychology. In most cases, a Ph.D. or Psy.D is required if you want to have a career in research, teaching, or clinical practice in Industrial Psychology.

A master’s degree in IO Psychology allows you to pursue careers such as:

Mostly, I-O psychologists can begin working on organizational development without obtaining a state license. However, you should consider getting a license to be recognized as a psychologist and operate in a clinical context.

To get licensed, a person needs to pass the EPPP-Examination for Professional Practice in Psychology, finish a supervised internship, and graduate from a PhD school. Before pursuing licensure, you should find out what your state requires to ensure you’ll need a license. You can learn more about state licensing agencies through the ASPPB-Association of State and Provincial Psychology Boards.

Before pursuing this career, it is crucial to remember that becoming an industrial psychologist will not qualify you to treat or diagnose mental health conditions. Your job duties are strictly limited to assessing a person’s work-related personality traits and human behavior.

Industrial Psychology ROI: Education Cost and Salaries

Becoming a certified industrial psychologist takes more years, so you’re likely to spend more money pursuing this path than an Organizational Leadership career. 

Industrial psychologists, or IO psychologists, are among the highest-paid psychologists. They are paid an average of $144,610 annually and have a growth rate of 6% from 2022 to 2032.

A career in Industrial Psychology is for you if:

A career in Industrial Psychology is NOT a great fit if:

Organizational Leadership vs Industrial Psychology - fact

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