Why are labor costs always so high?
It’s not a clear and easy answer, but it does come down to one thing: Labor isn’t out of control, it’s just inefficient.
And understanding this can mean you avoid losing around $1,500 a month. This pizzeria labor cost breakdown shows where labor dollars actually go, and why many high-volume shops lose money despite being busy.
Understanding the Real Pizzeria Labor Cost Breakdown
Labor accounts for roughly 25–35% of a pizzeria’s revenue; hourly wages, payroll taxes, overtime, and managing staff during peak hours.
What most owners don’t see in their labor breakdowns is how these hours are being spent.
A typical pizzeria labor cost breakdown includes:
- Order taking and payment handling
- Repeating orders over the phone
- Correcting mistakes and remakes
- Managing rush-hour interruptions
None of these directly improve food quality or customer experience, but they consume hours every day.
Restaurant Labor Inefficiency Hides in Plain Sight
Where does restaurant labor inefficiency really get expensive?
Phone Ordering:
- Phone-heavy ordering pulls staff away from the make line.
- One employee answers calls while another waits for instructions.
- Orders get repeated, clarified, or corrected mid-rush.
Slice data shows that pizzerias using online ordering save 80–100 labor hours per month.
This isn’t about cutting staff.
It’s about removing unnecessary work.
What 80–100 Hours a Month Really Costs
Average labor costs around $15 per hour.
- 80 hours × $15 = $1,200 per month
- 100 hours × $15 = $1,500 per month
That’s $14,400–$18,000 per year lost to restaurant labor inefficiency.
Why Busy Shops Feel Broke
A common phrase in the industry is:
“We’re slammed, but the money isn’t there.”
This is because of a broken pizzeria labor cost breakdown. For a $1M pizzeria, every 1% of labor inefficiency is roughly $10,000 in lost profit per year. High order volume coming through inefficient channels means:
- More staff per shift
- Longer hours
- Higher payroll
- Flat margins
You’re doing more work without keeping more profit. Hidden labor cost isn’t showing up as a staffing problem, it’s showing up as flat margins.
How Ordering Channels Affect Labor Costs
Not all orders cost the same.
Slice data shows:
- Average online order: $42
- Average phone or register order: $28
Why this is important…
Online orders:
- Require no order-taking labor
- Reduce errors
- Free staff to focus on production
Phone orders:
- Interrupt workflow
- Take longer
- Increase mistakes
Shifting a portion of orders online is one of the fastest ways to reduce labor costs pizzeria owners struggle with, without layoffs or pay cuts.
How to Reduce Labor Costs Without Cutting Staff
When owners hear “reduce labor,” they think shorter shifts or fewer people.
That’s not the goal.
The goal is to reduce labor costs pizzeria owners can’t see, by eliminating waste.
Slice helps shops:
- Move repeat customers to digital ordering
- Increase online orders by ~5% per year
- Add phone orders without adding staff
- Save ~1,000 labor hours per year
That’s how labor costs come down while service improves.
The Building Effect of Labor Efficiency
Labor efficiency doesn’t just save money this month.
It also:
- Improves profit margins by ~2.5% per year
- Saves $2,000+ per month in combined labor and operational costs for $1M shops
- Reduces burnout and turnover
- Makes scheduling predictable
This is why labor efficiency is one of the most reliable ways to stabilize a business.
What the Data Shows
Across the Slice platform:
- 100,000+ consumers order pizza weekly
- Shops receive ~3,000 marketing emails and texts per week on their behalf
- The Slice app adds ~24% more monthly orders
- The average Slice pizzeria does $1M+ in annual sales
These shops aren’t staffed heavier.
They’re staffed smarter.
The Takeaway
If your labor costs feel out of control, your shop isn’t broken.
Your pizzeria labor cost breakdown is simply revealing inefficiencies you may have missed.
Recognizing restaurant labor inefficiency and making it easier for customers to order without staff involvement can reduce labor costs while keeping quality, speed, and sanity. That’s how a $1,500 monthly labor leak turns into real profit, without cutting corners.
Ready to chat about reducing labor costs?