[dkersten]

Peopleware talks about this. There is a cost to overtime in terms of lost productivity afterwards and in terms of developer happiness. When developers are unhappy, their work quality drops and eventually they leave. Cost of employee turnover is mentioned as a cost that is actually quite high, but rarely factored in.

They also say that overtime can make sense if its short and a rare occurrence.

[tigroferoce]

An employee who leaves is a tragedy, especially in smaller companies. His work has to be shared among the other (implying even more extra time). Then you have to start a new acquisition process to hire someone new, train him, fit him into the existing group and so on. And if someone leaves because of the company culture, there is the possibility that other will follow, making the cost even higher.