A growing number of employers are beefing up workers' child care benefits — driven by a labor market that gives workers more power and the inordinate difficulty of caregiving.

The big picture: 56% of American companies say they're prioritizing care benefits in 2024, according to a new Care.com survey of C-suite and HR leaders.

• Child care outranked mental health support, health and fitness discounts, commuter benefits and a range of other perks — and it was the No. 1 priority after basic benefits like health insurance and paid time off.
• 50% of company leaders said they're prioritizing senior care benefits, and 25% said the same for pet care.

Why it matters: The hit to the U.S. economy from insufficient care is staggering.

• Lack of available child care costs the economy $122 billion every year, according to a 2023 study from the bipartisan Council for a Strong America.
• The blow from workers missing or quitting work to care for seniors and sick family members is around $44 billion, per Blue Cross Blue Shield.

Between the lines: Several factors are pushing companies to step up and provide new care benefits.

• Throughout the pandemic, day cares and nursing homes shuttered in huge numbers, raising the demand for care at home.
• Pandemic-era federal child care funding, which was supporting more than 80% of licensed providers, expired in October.

On top of that, "it's been a tight enough labor market for long enough that employers are having to meet employees where they are," said Alicia Modestino, an economist at Northeastern University.

• "Companies are focusing on [care] from a productivity perspective and a retention perspective," said Brad Wilson, CEO of Care.com. According to Care.com's survey, 1 in 5 U.S. workers have left a job because their employer didn't provide adequate care benefits, and 1 in 5 say they would switch jobs for better support.

Zoom out: The care industry itself has changed as a result of the pandemic. "There's been a fundamental shift in both where care happens and where workers are," Modestino said.

• As facilities close and slots at day cares and nursing homes disappear, more workers are looking for caregivers to come to their homes.
• Companies are responding to this by offering cash, which gives workers the flexibility to arrange care however they want.

Some examples: Chobani offers stipends for senior care and child care,

• Salesforce gives workers $2,000 for doula services to use in the early weeks after birth, and Trane Technologies puts cash into dependent-care flexible spending accounts, Bloomberg reports.

The other side: Google and General Mills — are closing down on-site child care centers, which was once considered the gold standard.

Reality check: The shift from institutional care to at-home care leaves millions of Americans behind.

• Workers on the lower end of the wage spectrum aren't getting access to the same flexibility and subsidies from their employers, Modestino said. Most of them rely on the network of publicly subsidized centers that bore the brunt of the pandemic pain — and unlikely to ever recover.
• "Without the public option, you lose that emphasis on equity."