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The Sub- fields in Business psychology: Explained, skills required, trending areas and potential.

Keywords: Business psychology, potential, skills, learning and development, organisational development, employee selection, ergonomics, performance management, employee well being, Diversity and inclusion, Leadership development, UI research.


Business psychology, in simple words, is the application of psychological principles at work. It goes by other titles such as Industrial, organisational and work psychology as well. Business psychology has many sub-fields to offer, which have been booming in the past years.

Sub-fields in Business psychology

1. Learning and development

The goal of learning and development is to develop or change the behavior of individuals or groups for the better, sharing knowledge and insights that enable them to do their work better, or cultivate attitudes that help them perform better (Lievens, 2011).

The learning and development manager is responsible for the training and professional development of an organization’s employees.

The areas that are currently trending under learning and development are the integration of the virtual into reality,the mainstream adoption of data in corporate learning design and integrating learning into everyday life.

Skills required: Change management, Project management, Strategic and critical thinking, relationship building skills, marketing skills and collaboration.

However, the good news is now more than a third of L&D professionals globally are expecting their budgets to grow; 57% of talent developers plan to spend more on their online learning programs; and 38% expect to spend less on ILT (Instructor led training).

Top companies that hire L&D officers: Seattle Genetics, SAS, Amazon, Bonobos, AT&T, paychex, Schneider Electric.

2. Organisational development

According to Human Synergistics:“Research has found links between culture and performance.” A large factor for a successful organisation is the organisation culture.

Organisation Development is an objectives based approach to systems change within an organisation. Organisation development enables organisations to build and sustain a new desired state for the entire organisation. (Ascender).

There are a few elements in the definition (adapted from Cummings & Worley, 2009) that stand out which are that it is critical and science based, build capacity to change and achieve great effectiveness and develop, improve, and reinforce strategies, structures, and processes.

Skills required: effective leadership, communication, influencing and impact, conflict management and coaching.

Top companies that hire OD practitioners: Bain & Company, Deloitte, Boston Consulting group, McKinsey & Company.

3. Employee psychometric assessment /recruitment

Employee selection, also known as candidate selection, is the process of finding new employees who are best suited for the role at hand. On average, each corporate job offer attracts 250 resumes. So it is important for every company to have recruiters who have an excellent knowledge base of what they are doing. This is one of the most important and widely used areas of business psychology. I/O psychologists play an important role in psychometric assessments of the candidates. Psychometric tests measure the skills and personality traits that determine a suitable candidate for a particular position. The tests are developed according to scientific methods and are designed to be objective and impartial. This is to hire candidates by reviewing not only their skills but their aligned personality and required behaviors too.

Job applicants who do not receive a job offer are 80% more likely to apply again if they already had a positive candidate experience and 63% of job seekers will likely reject a job offer because of a bad candidate experience, this shows that this is an important role that requires expertise.

Skills required: Decision-making skills, marketing skills, technical skills, empathy and strategic thinking.

Top companies: Every company no matter the size of the firm hires recruiters, some might prefer people from an HR background, while some might prefer an IO psychology background. With a master’s in human resource management, you’ll be prepared to focus more on the business-side of HR, while, With a masters in I/O psychology, you’ll be prepared to focus more on ensuring an organization’s people are performing well.

4. Ergonomics

Ergonomics is the process of designing or arranging workplaces, products and systems so that they fit the people who use them. Also known as human factors research, ergonomics is frequently a subfield within Industrial and Organizational (I/O) psychology.

In ergonomics emphasis is placed on efficiency and how well individuals interact and perform within their workplace and with systems and products. “Indirect costs associated with the injury are estimated to be 3-5 times more expensive than the direct costs of the claim”. It is also considered that what's needed to succeed in ergonomics is education, credentials, experience, professional certifications, affiliation with professional groups, and continued training and development. The needs and opportunities for further research discussed here are expected to be amongst the more important challenges to the ergonomics community for the immediate future.

Skills required: Technical skills, ability to analyse, strategic thinking, calibrate and use instruments accordingly and technical writing skills.

Top companies: Tesla, Amazon, Universities, KIA motors.

5. Performance management

Performance management is a corporate management tool that helps managers monitor and evaluate employees' work. Performance-management programs use traditional tools such as creating and measuring goals, objectives, and milestones. They also aim to define what effective performance looks like and develop processes to measure performance (Investopedia). 72% of respondents felt that their performance would improve with corrective feedback. And who is going to give it to them? You are!

Skills required: Goal setting, assertiveness, decision making, empowerment and motivation, coaching and mentoring.

Top companies: Every company no matter the size of the firm hires performance managers , some might prefer people from an HR background, while some might prefer an IO psychology background.

6. Employee well-being

When talking about employee wellbeing, think about it as the way employees’ duties, expectations, stress levels and working environments affect their overall health and happiness. To know more about employee well being, click here. Further, to know more about corporate wellness programs, click here.

Research by SHRM indicated that three-quarters of respondents offered wellness programs, resources, or services to their employees. Among these respondents, 50% reported increased employee participation than in the previous years.

Skills required: Interpersonal skills, communication skills, empathy, understanding of health and wellness, organisational skills.

Top companies: Netflix, Google, amazon, Slalom, SHRM and many more.

7. Diversity and inclusion

Diversity and inclusion are two interconnected concepts—but they are far from interchangeable. Diversity is about representation or the make-up of an entity. Inclusion is about how well the contributions, presence and perspectives of different groups of people are valued and integrated into an environment (Great place to work).

43% of companies with diverse boards noticed higher profits, this is aided by diversity and inclusion officers from an IO psychology background.

Skills required: efficiency, organisational skills, empathy, compassion, broad knowledge of diversity, communication skills.

Top companies: Sodexo, Johnson & Jhonson, Mastercard, Accenture, EY, Coca Cola.

8. Leadership development

Leadership development refers to any activity that enhances a person's ability to assume leadership roles and responsibilities. Examples include management courses, executive education, seminars and workshops to internships.

These types of learning opportunities focus on developing the knowledge, skills, self-awareness, and skills necessary for effective leadership (Lumen learning). Methods of leadership development can be 360 degree feedback (Improving your leadership effectiveness requires behavior change. A 360-feedback process, when done right, greatly increases the chances that change will occur.), formal training, developmental job assignments, coaching and self-directed models.

Skills required: Communication skills, honesty, technical skills, influence, strategic and critical thinking.

Top companies: Johnson & Johnson, Abercrombie & fitch, Ford motors and many other top companies. Most of the companies hire for leadership management/development roles.

Honourable mentions:

There are many more fields in business psychology that have been gaining momentum, some of which include - psychometric testing (Psychometric tests examine an individual’s capabilities and preferences, to provide data that can help assess a candidate’s “fit” for a role and organisation.), career coaching (Career counseling is a type of advice-giving and support provided by career counselors to their clients, to help the clients manage their journey through life, learning and work changes.) and the most recent and upcoming one is UI researcher (UX researchers systematically study target users to collect and analyze data that will help inform the product design process.) To know more about UX research, click here.

Business psychology as we see it is a very wide and diverse field, where one can have more than one title associated with their jobs; there is no restriction of being called just as a business psychologist. The field requires experience and expertise, which opens up a wide array of paths to folks who wish to pursue this field of study. The field is relatively newer to the market, but is expected to grow exponentially over years, opening up more opportunities.

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