This study investigates perceived external employability (PEE) as a personal resource in relation to job insecurity and exhaustion. We advance the idea that PEE may reduce feelings of job insecurity and, through felt job insecurity, also exhaustion. That is, we probe the paths from PEE to job insecurity and from job insecurity to exhaustion. We furthermore account for possible reversed causality, so that exhaustion → felt job insecurity and felt job insecurity → PEE. This aligns with insights from the Conservation of Resources Theory, which is built on the assumption of resource caravans passageways and associated gain and loss spirals. We based the results on a sample of 1314 workers from two Finnish universities. Respondents participated twice in the study with a time lag of one year. We found that PEE related negatively to felt job insecurity and vice versa. Similarly, there was a reciprocal positive relationship between felt job insecurity and exhaustion. We conclude that PEE may prevent feelings of insecurity and, through reduced job insecurity, also exhaustion.