As an Industrial/Organizational Psychology doctoral student, the question that is bound to come up is "Should I go into academia or industry?".
Although personally I have always leaned towards going into industry, I would be lying if I told you that pursuing the academic route has never crossed my mind.
So...here is a summary of my research on the differences of pursuing the two routes in terms of the following 8 factors that will hopefully help you make a decision:
💡 1. Income
💡 2. Location
💡 3. Job security
💡 4. Other perks
💡 5. Job Market
💡 6. Nature of the work
💡 7. Autonomy
💡 8. Work-life balance
This article by no means persuades you to go one way or the other. It merely lays out the facts accumulated from recent studies and my experiences talking to I/O PhD students over the years.
I hope to help you make a more informed decision as you continue to ponder this important question. Maybe you will have an answer after reading this article.
Source: 2019 SIOP Income & Employment Report
💡 1. Income
One clear difference between going to industry versus academia is income.
According to the 2019 SIOP Income Survey, IOs working as practitioners (median income of $122,143 ) tend to have around 11% higher incomes than those working as academics ($109,915).
As can be seen below, overall IOs who go into practice earn more than those who go into academia at all stages of their careers.
Source: 2019 SIOP Income & Employment Report
Source: 2019 SIOP Income & Employment Report
In general, faculty salaries in the U.S. have been relatively stagnant over the years. According to the American Association of University Professors' (AAUP) 2019-20 Faculty Compensation Survey, faculty salaries have barely moved over the past four years.
In fact, average salaries for full-time faculty in U.S. college and university fell by almost 0.5% after adjusting for inflation in the 2020–21 academic year according to the 2020-21 AAUP survey.
In general, faculty's salaries are not expected to increase much from year to year, unless you "job hop".
Source: American Association of University Professors’ 2019-20 Faculty Compensation Survey
You can see the salary levels for different types of academic roles below:
Source: 2019 SIOP Income & Employment Report
Within academia, salaries differ depending on the department (business/psychology/others) and type of institution (doctoral/master's/bachelor's).
Department
In particular, Business/management departments pay significantly more than Psychology and other departments. According to SIOP Income Survey, I-Os in Business/management departments tend to have median income of $160,000, compared to those working in psychology departments with median income of $95,000.
Source: 2019 SIOP Income & Employment Report
Type of Academic Institution
Income is also higher for doctorate academic institutions compared with master's and bachelor's only institutions.
Source: 2019 SIOP Income & Employment Report
Public vs. Private Institutions
Interestingly, unlike in some other fields, I/O doctoral-level academics' income do not seem to differ between public and private institutions.
Source: 2019 SIOP Income & Employment Report
Bonuses
According to the 2019 SIOP Income & Employment Report, it's more common among doctoral practitioners to earn bonuses (<15% who received bonuses reported working in academia), and they also reported earning more (median of $16,000) than doctoral academics ($4,000).
Supplemental income
Doctoral academics made a median salary of $125,000, while practitioners made a median salary of $140,000 when including supplemental income. You can see the practitioner vs. academic supplemental incomes in the tables below.
Source: 2019 SIOP Income & Employment Report
Source: 2019 SIOP Income & Employment Report
💡 2. Location
There are only so many universities offering I/O Psychology doctoral programs and organizational behavior programs in the business schools. Universities with I/O programs are mostly located in smaller towns, so if you like to live in larger cities, there are not as many options.
Regarding location of industry jobs, there are more and more hybrid and remote roles nowadays, so you may not be as bound by location if you choose to work as a practitioner.
💡 3. Job security
Academia
Tenured faculty get lifetime appointments and can only be fired for financial and ethical reasons. This means pursuing academia will provide the most job security and significantly reduce the risk of unemployment.
Industry
Going into industry does not guarantee lifetime employment and you can be fired at any time at the company's discretion.
💡 4. Other perks
Academia
There are various perks that tenured faculty get. For example, they can enroll in classes each semester for free, the university helps to provide employment for their spouse if needed, spouses and dependents of the faculty can be eligible for reductions of tuition.
Faculty get the winter and summer holidays off but most take on some other roles during these down times to earn extra money and/or just do more research, but again, you have the choice on what you want to do.
Industry
The perks you get as a practitioner will vary significantly depending on the company and industry you are in. For example, some tech companies offer free food, free gyms and other amenities at work. Public companies may offer stocks and options to employees that is rare in academia (see Figure 28 below). Some organizations even offer unlimited Paid Time Off!
Source: 2019 SIOP Income & Employment Report
💡 5. Job Market
Getting tenured
First off, getting a tenure-track position is much more competitive compared to getting any entry-level jobs in industry. You need to plan ahead during your PhDs to get certain numbers of publications and have a track record of teaching. Getting papers published is in itself a very difficult process that can take many years.
Then you have to get tenured. The tenure process is long and arduous that takes around 7 years. At the time of the reviews, the candidate prepares a dossier with their list of publications, teaching, awards and grants, etc. The departmental tenure committee and an external committee of reviewers in the field will review and make recommendations on whether they should be tenured. Then, the dean of faculty, and finally the provost will make the final tenure decision.
Getting a job in industry
Although job hunting can be competitive when the economy is bad, getting a decent job in general after getting your PhD is generally much easier than pursuing a tenure-track professorship because of the simple fact that there are more jobs!
There is a wide range of entry-level jobs available for I/O psychology PhD graduates (see Internships & Entry-Level Jobs in Industrial/Organizational Psychology - Tips & Resources).
💡 6. Nature of the work
Academia
Professors have three major responsibilities:
Teaching - teaching courses and mentoring graduate students.
Research - this mostly consists of self-directed research that involves reading, writing, publishing papers and applying for grants. Research projects can take years to complete from start to getting it published.
Service - this involves being members of university committees, serving as editors of academic journals, engaging in administrative roles (e.g. Chair, president, officer) of academic organizations, participate in speaking engagements and serving as panel chair/discussant at an academic conference.
Industry
The nature of the work in industry can vary significantly depending on the type of role, organizational and industry you are in.
In general, in industry, you tend to work on projects that have more immediate and direct impact with faster turnarounds compared to research projects in academia. Being part of an organization means the focus is on doing projects that meet the organization's goals, which is different from the goal of advancing knowledge in the field in academia.
There are generally two main types of applied work in I/O psychology:
Internal People Analytics/Research - Acting as an internal consultant within a company's HR department. This usually entails pulling, cleaning and analyzing data, designing and/or conducting research studies, and presenting findings and providing recommendations to leadership to inform people-related decisions and improve people-related practices.
External HR Consulting - Acting as an external consultant to help client organizations solve their people-related problems and inform people-related practices. This includes, but is not limited to conducting job analyses, competency modelling, developing assessments used in personnel selection, development and promotions.
Check out I-O Career Paths in Government to find out more about careers in government.
Be sure to check out my other article on "Internships & Entry-Level Jobs in Industrial/Organizational Psychology - Tips & Resources" to find out more about the wide range of entry-level jobs available for I/O psychology graduates.
💡 7. Autonomy
Academia
As a professor, you are your own boss and have lots of autonomy. You have plenty of freedom to decide what, where and when you want to work on each day. This does mean you have to be a self-starter, good at time management in order to get things done, as there is little external pressure like a manager who keeps you accountable.
Industry
As a practitioner working for some organization, you usually have to work during allocated working hours. You are assigned work that you have to do and meet project deadlines that align with the organization's goals. Going into industry is for you if you are not picky about what projects to work and is open to working on anything that the company asks you to do.
💡 8. Work-life balance
Academia
Although you can work anywhere you want and any time you want, the freedom also means you can work all the time if you wanted to. There is no clear boundary between life and work if you don't deliberately create that yourself. Many academics work in the evenings, during the weekends and holidays.
Especially during years when you are trying to get tenured, you need to publish certain amounts of work in order to get tenured so you will feel pressured to work a lot. This usually means you are more likely to be stressed, and feel burned out. This will be especially tough if you want to raise a family and spend quality time with them during this process. As a result, many delay having a family after they get tenured.
Industry
Although it will vary depending on the industry and particular culture of the company, but there are plenty of jobs in industry where there is great work-life balance. Outside your working hours, you are basically free to do what you want. You can spend more time on your hobbies, explore and cultivate new ones, and you will have more time to raise a family if that's what you want.
So How Do I Decide?
Here are some questions relevant to some of the key factors discussed to help you decide whether academia or industry is the right path for you:
💡 Income
How much do you care about maximizing your salary potential?
💡 Nature of the work
Do you like to see immediate results or are you willing to invest long-term and see the fruits of your labor many years down the road?
Do you enjoy mostly working independently and spending most of your time reading and writing?
💡 Autonomy
How important is it for you to have the freedom to decide what to do with your time?
Are you motivated to manage your own time and comfortable deciding what to work on each day? Or do you prefer to have some structure in your day and some guidance on what to work on?
💡 Work-life balance
Is spending time on activities outside of work important for you?
Do you mind having to work late nights, weekends and holidays?
Conclusion
To decide whether you want to go into academia and industry, you need to get to know yourself, your strengths, personal values and preferences for styles of working.
For example, if you are truly passionate about research, creating knowledge and advancing your field of study, all the seemingly "disadvantages" of going into academia may not mean much to you. But if you tell me you want to maximize your income potential, then academia may not be for you.
If you have any questions and if you want to learn more about how I decided to go into industry versus academia, feel free to schedule a time to chat with me here.
References
SIOP. (2019). Income & Employment Report. https://www.siop.org/Research-Publications/Items-of-Interest/ArtMID/19366/ArticleID/4592
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