More than just a salary - total compensation at Woola

When talking about compensation, most people naturally focus on salary. But when it comes to startups, particularly smaller ones, the concept of "total compensation" goes far beyond just a paycheck. 

Startups usually operate on tight budgets and may not always match the base salaries offered by larger, more established companies. However, they often provide a unique blend of benefits, equity, growth opportunities, and a culture that makes the overall compensation package appealing. 

What kind of animal is “total compensation” anyway?

Total compensation refers to the entire value of everything you gain from a job, not just your base salary. It includes tangible components like bonuses, stock options, and health benefits, as well as intangible perks like work-life balance, career development, and workplace culture. 

At small startups, total compensation is a package that reflects the company’s current resources, priorities, and ambitions. Understanding these nuances can help you better evaluate a startup job offer and see if it aligns with your personal and professional goals.

Breaking down total compensation at startups: the Woola example

Let’s explore the main elements that typically make up total compensation in a startup setting – based on the example of how we do it at Woola):

1. The obvious - salary 

At Woola, we pay our employees a fair salary. We want to make sure our people feel valued and safe from economic changes. 

Now, ‘fair’ is a subjective word, so we do take an individual approach with each person, looking at their background, skill set, responsibility, and so on. We’re very happy to be considered TOP 16th in terms of salaries in the production industry in Estonia.  

Once a year, we carry out a thorough salary review, focusing mainly on changes in each country's economy: things like inflation rate, consumer price index, and tax changes. We also consider any changes in the employee’s role that require salary adjustments. 

2. Performance-based bonuses (in our case, “Semester awards”)

In addition to a monthly salary, we’ve introduced performance-based “awards” at Woola. As a company, we’re on a very ambitious mission and, therefore, have to work hard to reach our goals. We understand that we’re asking a lot from our team and want to reward them for going the extra mile. 

Every six months (a time period we call “semester” at Woola), each person sets motivating yet challenging goals for themselves. At the end of each semester, we gather for what is known as a Strategy Gaala event where we review our goals. This is also where we grant monetary awards for every achieved goal. It keeps us motivated and gives all of us a little extra to work toward. 

3. Stock options

This one isn’t revolutionary but rather a common practice among startups. We believe that every employee is part of making this company a success, so giving out stock options is a no-brainer. This way, all employees can become partial owners of the company.

While it isn’t an instant reward that pays today’s bills, it does give an additional push to invest your time and efforts to see the company grow because you might be rewarded for it further down the line. 

At Woola, we offer stock options based on the person's role in the company, their level of responsibility, and tenure. 

4. Flexible work arrangements & work-life balance

We firmly believe that the office environment isn’t for everyone – which is completely fine. What we are after are results. 

So, we allow our team to decide where they are most productive and how to create that work and personal life balance. This freedom is invaluable, particularly if you have a lot of personal obligations or just prefer a work style that doesn't adhere to a rigid 9-to-5 schedule. 

That said, there are some rules in place because as a small team, we still rely heavily on each other for information and collaboration. Therefore, we ask all our employees to be in “work mode” from 10 am to 3 pm Estonian time. Where they do it, how they do it, and how they manage the rest of the working time is totally up to everyone’s discretion (as long as there is high-speed Internet, of course). 

Personal time off falls under this point as well. After all, time is our most valuable asset! In addition to legal vacation allowances, we offer 3 paid personal days per year (take off whenever without notice), birthday PTO, a 4-day work week during summer months, and every last Friday of the month off. 

We recognize that work-life balance isn’t just a perk—it’s essential to retaining talent and keeping morale high. The flexibility to work remotely or adjust your schedule can lead to increased job satisfaction, which is a form of compensation in itself. This all leads to higher productivity levels for the company as well, so talk about a win-win situation. 

5. Mission-driven culture

Woola is on a mission to cut 50% of global fossil fuel based bubble wrap usage by 2030. So, we know exactly what we want to achieve and how much we need to work to get there. 

While the culture of the company doesn’t seem like an obvious part of total compensation, hear me out. If you believe in what the company is doing and feel personally invested in its mission, you will likely find greater satisfaction and motivation in your work. The chance to contribute to something bigger than yourself can be a powerful incentive that goes beyond any dollar figure. Isn’t that what many of us look for in a job?

We invest a lot of time and effort into finding the right people to work at Woola. What we have ended up with is a bunch of people with similar values, a great sense of humor, and ambition. No wonder we have a great time during work days. This calls for a small cliché - teams that have fun together, stay together. 

6. Other benefits: travel allowance, learning & development and sports compensation

In addition to everything already mentioned, we offer some other benefits to our team. The biggest game changer has been the yearly travel allowance. The idea is simple - we give all our people the chance to travel the world and cover some of the costs for them. The benefits traveling offers are huge - from expanding your horizons to being able to get out of your routine and rest. It just makes sense to us. 

Everyone at Woola also gets a yearly book allowance to invest in individual learning. We might not have the biggest learning & development budget but we do find ways to support professional development. 

We also value and promote a healthy lifestyle, so we offer a sports compensation option and create different sports and health-related challenges for our team. 

The upside (and tradeoffs) of startup compensation

One key advantage of joining a startup like Woola is the ability to shape and grow alongside the company. For example, your equity might be modest at first, but as the company scales, that initial investment of time and energy can turn into substantial financial gains. Similarly, the hands-on experience you gain can be invaluable in advancing your career faster than you might in a corporate environment.

However, it’s essential to understand the trade-offs as well. Startups, especially in the early stages, can be high-risk, high-reward environments. While there’s significant potential for financial and personal growth, the stability and predictability of compensation is usually lower than at established firms. 

If you’re comfortable with some risk and believe in the startup’s mission, these trade-offs could work in your favor. The risks are what make it exciting! 

Final thoughts

At a small startup, total compensation can be a compelling mix of financial, personal, and professional rewards that go beyond just a paycheck. Whether it’s the promise of equity, flexibility in your work life, the thrill of contributing to a meaningful mission, or the chance to grow in your career, there’s more to consider than salary alone. When evaluating a startup offer, it’s worth looking at the bigger picture to see if the overall package aligns with your goals and values.