The child-care crunch sparked by the pandemic has become a crisis for many workers and small businesses, as would-be employees stay at home rather than working.

The dynamic is hindering the economic recovery, and disproportionately impacting women in ways that may last for years, some observers say.

Only a month ago, the consensus among top economists and business leaders was that fall would bring a surge in hiring, with the end of extended unemployment benefits, schools reopening and continued vaccinations boosting labor participation.

However US employers added far fewer jobs than expected in September — the lowest number of the pandemic-era recovery. A defining feature of the recovery has been vast numbers of open jobs that employers can’t fill, which is making new job creation increasingly lackluster.

Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management, told Yahoo Finance Live this week that rather than “a big bang, a flow of workers coming into the market and getting employed,” it now seems more likely that it’ll be a slow trickle of employees returning to the workforce over the course of months.

'Struggling to get new people in'

While economists were hoping to see recovery in sectors hardest hit by the pandemic, female labor force participation was also expected to go up as reopened schools eased child care issues for some. Yet the number actually fell from 56.2% to 55.9%.

“We've been struggling trying to get new people in,” Tiara Flynn, owner and CEO of Sumnu Marketing, a marketing consulting firm for small businesses, told Yahoo Finance in an interview.

As more employers push to get employees back in-house, some new applicants themselves are taking a harder stand.

“A lot of them either want pay raises or they don't want to have to come into the office, even if it is on a hybrid schedule,” Flynn added.

And childcare has emerged as another flashpoint between workers and potential employers.

Flynn added that many applicants and employees are complaining about caretaking costs. Recent Harris Poll data reflected how working parents feel “overwhelmed” by decisions related to managing their children.

“There's not a lot of programs that are available or fitting for the working mother,” Flynn said.

A recent report from the Small Business for America’s Future found that over 50% of small business owners believe that the lack of affordable high-quality child care for employees has had a negative impact on their business.

Of those polled, 66% believe the federal government has a role in supporting universal access to affordable, high-quality child care. Only 70% of small business owners support federal funding dedicated to providing child care services to underserved communities.