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Fall in unemployment but a rise in job shortages: Could you risk quitting your job?

Could quitting your job be a bad idea?

A study released by the American EPI (Economic Policy Institute) reveals the US industries with the best and worst job prospects – with a focus on job vacancies versus unemployed workers seeking employment.

Although the start of 2016 saw a dramatic fall in unemployment levels and over a million more Americans in work compared with last year, there are certain industries in which there are high numbers of people seeking work and low levels of open vacancies.

For example, the report highlighted that the US construction industry has over 4.3 unemployed jobseekers applying for each vacant position. The arts, leisure and entertainment sector has 2.8 unemployed people (as well as those already in employment) competing for the same role. Other industries following this trend include educational services, durable and non-durable goods manufacturing and retail.

The results of the study suggest that those already employed within these industries may struggle to secure new work, should they decide to quit their jobs in search of better prospects. Anyone contemplating quitting their role should actively research current job availability within their industry.

It is always advisable to have a new job in place (with a written job offer) before resigning from any role but this report confirms that it becomes even more essential if working within the above mentioned trades.

To put this into perspective, on average across the American labour market, there are 1.4 unemployed jobseekers for every one job vacancy. This means that the construction industry has almost four times the level of competition when compared with other businesses. The result? Each construction job is highly sought after and fought over.

Workers who are made redundant in any of the industries with weaker job prospects will face a tougher time in securing alternative employment. So anyone contemplating voluntary redundancy on the assumption that they can find another job immediately afterwards may not find it possible to do so in reality.

The utopian scenario of more jobs than people seeking them is evident only in a few industries. These include healthcare and social assistance, insurance and financial services. Elise Gould, a senior economist at the EPI, said that the findings suggest ‘better prospects for jobseekers in these industries’ but also hastens to caution people that it doesn’t necessarily mean that everyone will successfully get a job in those industry areas.

So moving from one sector (with poor prospects) to another one with better prospects may not even be possible, even if there should, in theory, be sufficient jobs for everyone. This could be for a number of reasons, not least among which are a given candidate lacking the requisite skill set and industry-specific experience or knowledge.

Whilst the balance across American industries may differ from that in the UK, the principles are the same. If you are contemplating quitting, make sure that you have secured a new role before you do so.

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