Following a recent slump, recruitment of MBA graduates looks set for a comeback in 2006, says Caroline Haydon

Ever since the dotcom bubble burst there has been understandable reluctance to exaggerate good news. But now even the habitually cautious are prepared to admit that, as 2006 kicks off, not only is recruitment on the up in the traditional sectors, but efforts made in leaner times to diversify have also paid off. Career department heads are digging up more opportunities in a wider variety of fields.

Graham Hastie, head of careers services at the top-ranking London Business School (LBS), says there was a recruitment upturn in 2004, after quieter times in the three previous years. But things are looking even better now. "We've seen a massive resurgence in opportunities in investment banking and consultancy," he says. "The great news here is that in this sort of period, when things are accelerating, people need to rebuild teams that have been depleted when things were slower.

"The 'pyramids' that usually build up, with higher rankings at the top and a wider base below, have got out of shape during quieter times. People have been sucked up from the base to fill positions higher up. Now they are having to restock the bottom layers, as it were, to build up the classic shape again. And that's good news for our students."

Ninety-seven per cent of the LBS class of October last year received job offers within three months of graduating - up on 85 per cent the year before. That's something Hastie puts down not only to market upturn but a doubling in the money spent on career development.

"We've increased the professionalism and the range of advice we give our students, and that means we've gone out to companies we've not traditionally dealt with," he says. "One of our biggest recruiters now is BT - we had no relationship at all with them two years ago. The opportunities are far broader now."

Telecoms and IT are also on the list of recruiters upping their intake at the University of Oxford's Said Business School, where careers service head Simon Tankard says the whole technology sector is performing well. Well-known companies such as Amazon and Google are recruiting, as the IT manufacturing sector.

And while there has been caution on the High Street as retailers had a variable year, that hasn't affected bigger fish like Procter and Gamble, Unilever or Cadbury Schweppes, who are still taking on talent.

This rosy picture overall has tended to push down the number of graduates going for their own start-ups, says Tankard. "In tougher times, maybe people are more inclined to go for their own business," he says. "Now the take-up in this area is possibly slightly less. Around a quarter of students express an interest in new business ventures - in the event the actual take-up is far less, around 2 per cent."

Tankard also notes a trend for pre- and post-experience Masters students coming from abroad to stay and work in this country. "They're increasingly able to work in the UK on completion of their studies," he says. "Recent changes made to help top MBA students apply to stay here by means of the Highly Skilled Migrants Programme (HSMP) have been very helpful for them. They don't need a job offer to stay."

The HSMP works on a points system whereby past experience, achievements and qualifications are totted up to achieve the total necessary to get on the scheme. Cana Witt, MBA career development manager at Lancaster University Business School, says internships are also helping those who have just graduated to gain enough points to get on the programme. Lancaster has also noted a rise in the number of students returning to their previous work, but in an improved position - up from 10 per cent to 23 per cent this year.

These trends are borne out in Ireland, at University College Dublin Smurfit School of Business, where the graduation picture remains similar. Financial services, banks and consulting firms are still looking for graduates, and although there hasn't been the upsurge in IT or commercial jobs there was four or five years ago, the position is still strong, says MBA careers manager Tony Somers. Telecoms firms including Motorola, EsatBT and Ericsson have snapped up students.

"The main picture is of an increase in finance and consulting at the expense of business development and project management," says Somers. "I think this is a sign of an increasingly healthy recruiting market - a 'recovery' to some degree - rather than some major shift in the employment market, such as we saw with the dot.coms a few years back. The consensus is that opportunities are there, and there are more than there were three or four years ago."

The improved market has led to another change - students are confident enough to use headhunters as well as traditional career services. Director of career management services at Manchester Business School Clare Hudson says more of her students are turning to headhunting firms to move up the jobs ladder, and vice versa. "An increasing number of executive search companies are also targeting business schools," she says. "They don't come on campus, perhaps, but they post us jobs available. I used to headhunt myself and I advise students that it's a particularly good way to get into markets where it's difficult to network - developing markets, for instance, like China."

Latest figures from IESE, the graduate school of management of the University of Navarra, back up the British findings, pointing to a healthy recruitment picture across Europe. IESE says its students are becoming more mobile, with a higher percentage accepting job offers in the UK and Western Europe. Average salaries in consulting are up. And there are more job offers from offices in countries where salaries are higher, such as the UK, Germany and the Benelux countries. There's been an increase, too, in the average salary paid in industry, as high paying sectors such as pharmaceuticals take on more graduates.

Iain Reid: 'An MBA seemed a good way to change direction'

Iain Reid, 49, completed his MBA at Cranfield University in 1990. He has worked in the City for almost a decade and is currently an oil analyst for UBS investment bank.

By the time I did my MBA I'd spent 12 years working for Shell, initially as an engineer. I was getting fed up, so an MBA seemed a good way of changing direction and finding a more commercial role in planning or strategy.

After graduating I worked as a strategy adviser for an oil exploration company before being headhunted for what is now UBS investment bank. Studying for an MBA definitely provided the stepping stone I wanted. Not everything you learn is immediately transferable to one particular job. Ninety per cent of the value comes from studying with people from such varied backgrounds but what an MBA does is give you a new perspective.

I've been in the City throughout the boom of the late-Nineties and the crash. When I arrived I was told the City was a risky environment with a "hire and fire" culture, but I know people I worked with in the oil industry who have been fired, while colleagues in banking who got their heads down and worked hard are still there.

The good thing about the City is that it is very meritocratic. It's not a bureaucratic jungle and, if you are good at what you do, you will do well. There's always room for intelligent people who are analytical and persuasive, but MBA graduates shouldn't expect huge rewards immediately. You have to work your way up. I wouldn't say recruitment or rewards are back to the heights of the late Nineties, but there are some good opportunities.

Dawn Hanslip: 'The course changed my outlook and my job prospects'

Dawn Hanslip, 36, completed a three-year distance-learning MBA at Bradford University Management School in 2003 while working as an analytical chemist for the British Oxygen Corporation. She is now a marketing manager for BOC.

BOC were happy to sponsor me through an MBA but, as a chemist working shifts, the distance learning option was the route open to me. The course changed my outlook, and my job prospects. I was halfway through when the facility I worked at closed down, but the fact that I was studying for an MBA probably helped me to fit into other roles and I wasn't made redundant. Over 90 per cent of the senior managers here have MBAs so, in one sense, it was a box I needed to tick.

Science graduates are taught to think that there is a black and white approach to problems. Something is either right or wrong. But the MBA helped me to think in a different way and realise there is more than one way of reaching a desirable outcome. A lot of management comes down to how you deal with people.

Since graduating I have moved jobs and am now a marketing projects manager at the company's Guildford offices. There's simply no comparison with my old role - apart from the fact that I am still working within the same organisation and speak to some of the same people. I spent six years as a chemist and it was time to do something different and change direction. The MBA certainly helped me to do that.

Norman Celliers: 'It's a degree that prepares you to be a jack of all trades'

Norman Celliers, 32, graduated from Oxford University's Said Business School in 2000 and joined other MBA students to form a company marketing South African wine in the United States. More than five years down the line he is beginning to see the fruits of his entrepreneurial efforts.

We were fired up with the idea for the company when we graduated, but our efforts to raise funds didn't go well, and we went our separate ways as a group. I went into strategy consulting for a couple of years, which was great experience and something I couldn't have done without an MBA. It's a degree which prepares you to be a jack of all trades and it was brilliant grounding for what I am doing now, running South African Premium Wines. I do know people, however, who think their MBA will suddenly propel them into the job of their dreams, and this isn't always the case.

For me, the entrepreneurship project at Oxford was a real springboard because the opportunity we identified back then still exists. We now distribute wine in 40 US states and export to Russia, Norway and Canada. I plan to relocate to the US next year to grow the business further. There's always a gap between expectation and reality but the business plan I put together as a student is the foundation for the company today.