Why constant overtime is bad for your IT company

(Some meta-info: after all these technical articles, I have decided to take a sidestep into the managerial aspect of things.)

Some managers still go by the good old “if you make your personnel work overtime, all the time, you will finish sooner”. By the same account, some people still believe that the Earth is not round. The overtime will eventually kill your company and here is why I believe so:

• People have lives. Even if you insist on hiring ambitious, single persons, they will be quickly fed up with it. If the employees have a family, you can forget about them.
• If you pay overtime, the costs mount. If you do not (legally) pay overtime, the personnel will soon feel ripped off (as in “Hey, those 4 extra hours a day kinda halve my paycheck”). If you do not pay overtime (the illegal version of it), you might have (and IMHO, you should) legal trouble.
• IT work is not like an assembly line. If you force a person to work say 12 hours a day, it does not mean that he will perform 24 man-hour work in 2 workdays. Chances are that overall fixes that will be required, will take a lot more than the extra day the poor fella “saved” your company.
• Even if the pay is good, persons will quickly fed up. After all, what use are money if you do not get to enjoy them? Even if they stick to it in a “come on, two more months of this and I get the new car”, trust me, they will leave, which leads us to…
• High turnaround. If your people are fed up with you and they have a relatively up to date skillset, prepare to say “Buh-bye” to them. Once a competitor approaches them with reasonable terms, off he goes one person who might know more for your day to day operations than your average middle manager.
• Speaking of managers, constant overtime is a sign of bad management. Even if you choose to ignore the above, if your sales people have no input from the workforce and systematically underestimate the time that is required for a given project, is bad management. If your managers have the slave-driver mentality, it is bad management. “Lowballing” projects is bad management. Hire an extra guy, even a Jr one will take some load off the other persons.
• If you still require overtime, then do the world a favor. Fire all your managers and hire competent ones. If something cannot be done in a normal 40 workweek but needs to be done within a week, you’re out of luck. Perhaps you will get away with it a few times but when you will not, it will hurt.
• While you are at it, why don’t you go ahead and fire some of the HR people? A stick in the mud (or a dick in the team) will hurt your productivity. Hiring only “cheap” persons will not save you money, as it is more likely than not that they will stall and waste time.
• 8 hours of work are usually enough for most day to day operations. Instead of asking people to work more hours, try to implement some in-house productivity measurement and have people work more those 8 hours instead. Try to identify problems in your processes and performance bottlenecks and eliminate them ASAP.
• [edit] If people do not have the time to do their own research (you did bother to hire people that do at least a bit of research in their own time, don’t you?) soon they will stagnate. OJT can only get your people so far, a bit of extra boost is needed. And yeah, if your people are working 50 hour workweeks, you can’t seriously expect them to devote hours in the weekend.

Fortunately, while I have faced most of the above, I do not have to face them now so I consider myself lucky. This is not the case with everyone and while this is no Joel’s, read it