Free degrees, loyal employees

College wasn't the first thing on Katy Padgett's agenda when she graduated from high school in 1988. Instead, she stayed on as an administrative assistant at a company where she had worked as a senior.

Then, just around the time when she might have started to feel a seven-year itch, her office's parent company, Hartford, Conn.-based United Technologies Corp., made an offer to its employees that inspired in her just the kind of loyalty it was aiming for: Pursue any kind of post-secondary degree you want, job-related or not, and your employer will pick up the entire cost of tuition, fees, books, and three paid hours a week to study.

Now Ms. Padgett is brimming with enthusiasm, having recently earned a bachelor's degree that helped her step into her current job as UTC's community-relations specialist.

Her 14 years with the company is a long stretch in an era of peripatetic corporate careers. And it's largely the result of one of the nation's most generous education-assistance programs.

"Oh, you can't stop," Ms. Padgett says. "I plan to start my master's, hopefully by the end of this year."

While climbing the corporate ladder with one company is a cliché of a bygone era, many companies today are dangling advanced degrees to draw talented workers and keep them around for a while. More than 85 percent of corporations surveyed by the International Foundation of Employee Benefit Plans now offer some sort of education-reimbursement program, and the amount companies are spending on these programs is growing every year.

As a job perk, tuition assistance has long been a staple of corporate self-improvement, a way to boost productivity through a better-educated workforce. But more and more, paying for school is coming to be seen as a way to develop loyalty in a cutthroat corporate landscape.

"For many coming right out of college, if [a company] doesn't support the MBA, forget it, they won't even consider [it]," says Jane Rose, dean of the weekend program at Hiram College in Ohio.

The generosity and convenience of UTC's program has made the difference in many of its recruitment efforts, executives say. When a headhunter first suggested the company to Felice Gray-Kemp, she was skeptical. A successful tax attorney, she thought she'd end up in a competitive place like Manhattan. But when she interviewed in 1998, one of the main selling points was UTC's Employee Scholar Program.

Earning an advanced degree would be critical to her career advancement, she believed. "For tax attorneys, the holy grail of degrees is the LLM, master of laws," says Ms. Gray-Kemp. "It's very expensive, and it's a full-time program, which means you can take an unpaid sabbatical or try to do it part time and borrow $33,000."

So working for UTC allowed her to accomplish her goal much sooner than she had planned. Since the program required no minimum amount of time with the company to qualify, she didn't have to wait.

"[My interviewer] told me, the day you start working here is the day you can start going to school," Gray-Kemp says. "So by the time I got to my car in the parking lot, it was a no-brainer." She's been a tax manager with the company ever since, and should complete her LLM this year.

Despite many generous tuition-payment offers around the country, only about 10 percent of eligible employees are taking advantage of their companies' programs, say industry experts.

Back in 1995, UTC chairman George David wanted to understand why this was so. Since he had always had strong feelings about lifelong learning, the meager 6 percent participation rate at his sprawling corporation disturbed him. And as the head of the corporate parent of military hardware companies such as Pratt & Whitney and Sikorsky, he thought education was what would most distinguish his workforce.

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