Please help me talk some sense into my sister!

[mrs.b]

Don't most I/O psych jobs require at least a masters degree and the consulting jobs a PhD?

Consulting requires whatever you can sell, but yes, generally a PhD.

Employers demand education level comparable with what they can afford. Most will demand a graduate degree, but smaller employers may go with an undergrad (if you can find one that knows what I/O Psych is, or work it into a cover letter without sounding condescending). If she goes with an undergrad and does not proceed to graduate work of some time, she would just sell it like any HR-oriented undergraduate, just with a little more explanation since it's not a field that is well-known.