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Big-data psychologists

Every time you use an Internet search engine, sign up for a company "rewards" program or swipe your credit card, that information is saved and stored. The industries that amass these billions of bytes of data are increasingly hiring psychologists to help make sense of it, says Douglas Reynolds, PhD, president of APA's Div. 14 (Society for Industrial and Organizational Psychology).

"Big data, and what it means for business, is a hot topic right now," says Reynolds, who also serves as vice president of assessment technology at Development Dimensions International Inc., a human resources consulting firm. "We're in high demand."

Psychologists' ability to interpret numbers and human behavior makes them key members of many industry analytics teams, adds Suzie Weaver, PhD, a psychologist and senior analytic consultant with Epsilon, a global marketing and analytics company. "Analytics is at the core of everything we do, whether it's in research, the academic sphere or the business world."

Why it's hot

Forget puny gigabytes. Companies increasingly collect exabytes of data — one exabyte is more than 4,000 times the amount of information in the U.S. Library of Congress's Web archives. Within those data are solutions to big-money problems, such as how to keep employees motivated or the best time of day to run an ad for a new product. As a result, the days of acting on gut reactions, intuition or personal feelings are coming to an end, says Sara Roberts, PhD, the advanced analytics team leader in human resources at ConAgra Foods.

"A bad decision could cost millions of dollars," which is why companies are increasingly using data to inform their decisions, she says. Data analyses can help steer companies toward evidence-based solutions.

But analysis alone isn't enough, says Roni Reiter-Palmon, PhD, the Isaacson professor of I/O psychology at the University of Nebraska Omaha. After all, mathematicians and statisticians can crunch big numbers and decipher trends. What psychologists add to analysis teams is the training to think critically about human behavior.

"If all you're doing is analyzing data and looking for relationships, you can very easily be misled by casual patterns in the data," Reynolds says. "Psychologists interpret what that means. That's why we're sought after."

What you can do

Most big-data psychologists work in large organizations, such as Fortune 500 companies, Reynolds says. "An I/O psychologist might be asked to join a cross-functional team working with experts in finance and marketing," he says.

Analytics positions aren't confined to any particular business sector, Reynolds adds. "Hospitality, retail, consumer products, software — all of them have teams of people including psychologists looking at issues of how to better run their organizations using data analytics." Nonprofit organizations, universities and governments have opportunities, too.

Topics vary widely. Reynolds, for example, specializes in human resources, answering questions such as "How do you find out who stays longer? and "Who remains more committed to the organization?" He also uses data to evaluate the accuracy of performance reviews, improve employee training and encourage employees to get involved in company wellness.

The field is also ripe for psychologist-entrepreneurs. Smaller companies that don't have in-house analytics teams may need independent consultants, says Reiter-Palmon.

Earnings outlook

Recent I/O graduates with doctoral degrees start at about $85,000 a year, according to a 2011 SIOP survey. At ConAgra Foods, the starting range with a doctoral degree is $70,000 to $90,000, Roberts says. As employees grow in their careers, compensation packages remain competitive and may include bonuses, equity and other incentives.

How to get there

Choose a psychology program with rigorous statistics coursework, says Roberts. For example, Roberts took regression analysis and analysis of variance as a master's student. At the doctoral level, her courses included structural equation modeling and multivariate statistics. "Someone in I/O who didn't have those stats classes wouldn't be able to launch themselves in an analytics role," Roberts adds. Studying psychometric theory and behavioral research methods also helps in learning to collect and organize data to make sure you're answering the question at hand.

You don't have to be in I/O psychology to go into analytics, says Weaver, who got her PhD in developmental psychology and spent a decade in academe before switching to industry. Just build a strong foundation with statistics and experimental design courses, she says. "I had no background in business, but I had a background in experimental design and survey development," Weaver says.

To get a feel for how businesses are run, take additional courses in your university's business school, says Reiter-Palmon. "Then when you see the data and results of analyses, you'll be able to translate that into something that's meaningful to managers," she says.

Also, choose a degree program that uses the same statistics software that businesses use, says Roberts. Some software programs to look for are SPSS, SAS, Mplus and open-source packages such as R. "When you go into a business, you can say you're proficient in those programs," she notes.

Check out SIOP's website for student resources, including information on internships, jobs and conferences that offer networking opportunities, says Reynolds. Also, consider enrolling in one of APA's Advanced Training Institutes, which include workshops on data modeling and more. You may also want to check out networking opportunities offered by APA's Div. 5 (Evaluation, Measurement and Statistics) and tap your school's alumni network to find mentors and career advice.

Pros and cons

New data-collecting methods — online recruiting programs and tools that measure managerial skills, for example — make analytics a fascinating field, says Reynolds. "As an I/O psychologist, I think of this as an astronomer would if a new kind of telescope could allow you to see deeper into the universe," he says.

Some large companies are just beginning their analytics operations, so psychologists can help build these departments from the ground up, says Roberts. "This comes with challenges and benefits," she says.

But if you're not a numbers person, this isn't the field for you, says Reynolds. "You have to be comfortable working with massive data sets, computers and analysis programs," he says.

You also have to be comfortable with ambiguity, says Weaver. "If someone buys something, is it because they saw a TV ad or an email or heard about it through word of mouth?" she says. "Looking at the impact of one variable at a time is much harder; it's messier than in the lab."

Even in an imperfect world where every variable can't be controlled, Weaver says it's gratifying to harness data that help companies make smarter decisions about using their media budgets to drive sales.

For Roberts, the payoff is in discovering empirically backed answers to important questions — specifically, how to keep the ConAgra Foods workforce motivated and fulfilled. "We spend a third of our lives at work," she says. "If we can implement changes that make it more enjoyable, that's my biggest benefit."

Rebecca Voelker is a writer in Chicago.