We painted the “sign” (created the label), but currently it is still in the basement. No one can see it. Now we have to hang it up in the company.
This process is called Label Policy and many administrators stumble upon understanding this:
- The label defines the rule (e.g. “keep for 10 years”).
- The policy defines the target group (e.g. “All users in Germany” or “Only the finance department”).
Only by linking both elements in a policy does the label appear in the “drop-down menu” in Outlook, Word or SharePoint. Without this step, your label remains a pure database corpse.
- 👉 Mainarticle: Data Lifecycle Management: Data Lifecycle Management
- 👉 tom article: Setting up a retention policy
- 👉 tom article: Retention labels
Step 1: Select labels
First, we have to tell the system which signs we want to hang. You can create a policy for a single label or combine a whole bundle (e.g. all HR labels).
- Navigation: In the Purview portal, go to Data Lifecycle Management > Policies. > (Note: Sometimes you can also find this under “Records Management”, depending on your license).
- To start: Click on the “Publish labels” button. Attention: Don’t click on “Apply automatically”, this is the E5 way for auto-labeling. We want manual selection for users.
- Selection: The wizard starts. Click the “Select labels to publish” link. A sidebar will open. Find your freshly created label (e.g. invoices & receipts) here and check the box.
- Confirm: Click Add/Done, then click Next in the wizard.
💡 Tip (label bundling): You don’t have to create a separate policy for each label! That would quickly make your overview unreadable. It is best practice to put together thematic bundles . For example, create a policy called “Global Standard” in which you put all the labels that every employee is allowed to see (Internal, Public, Draft). Create a second “Finance-Only” policy that contains only the special tax labels, and later assign it only to the finance department.
Step 2: Administrative Units & Type
Just like with retention policies, Microsoft is asking for the scope here: Who should see these labels in the first place?
1. Administrative Units: This feature is intended for corporations that strictly separate their IT (e.g. the admin “Germany” is only allowed to create policies for German users).
- Recommendation: Leave this on “Full directory” unless you are working in a complex multi-geo environment.
2nd area: Adaptive vs. static (The license question): This is often where it is decided how much maintenance you will have to do later.
- Adaptive (Premium | E5): The policy dynamically searches for its targets by query (e.g. “All users where department = ‘Sales'”).
- Advantage: Zero-touch. New salespeople automatically see the label on the first day.
- Disadvantage: Requires expensive licenses.
- Static (Standard | E3 / Business): You select the locations manually (e.g. “All mailboxes” or specific users).
- Advantage: Works with any basic license. If you select “All”, the maintenance effort is zero.
- Disadvantage: If you only want to give the label to a certain department (without E5), you have to maintain the user list manually (groups technically work here, but new members are not always recognized live).
Our Pick: We choose Static because this is the default way for the masses.
Step 3: Where do you want the label to appear?
Here you determine in which applications the label appears for the user in the context menu.
The most important switches:
- Exchange mailboxes: The label appears in Outlook (Desktop, Web & Mobile).
- User view: Right-click on an email > policy (Assign Policy). Your label will appear there.
- Important: Labels are valid per email, not per folder (unless the user sets it to the folder).
- SharePoint communication sites & OneDrive accounts: The label appears in the document libraries.
- User view: The user selects a file, opens the information window (i-icon) on the right and finds the “Retention label” field there.
- Alternatively: You can show the “Label” column in the Library so that users can see and change labels directly in the list.
- Microsoft 365 group mailboxes & sites: This is the “combination switch” for modern collaboration. It covers the Outlook Groups mailbox AND the associated SharePoint Team Site (i.e. the files in Teams).
- Recommendation: Always activate this if you are using Microsoft Teams so that the labels are also available there in the file storage (tab “Files”).
Note: In this window, you’ll often see a reference to “Data Connectors.” If you’ve connected archiving solutions for WhatsApp, LinkedIn, or Slack, you can theoretically even apply your labels to this third-party data. But we’ll leave that deactivated here.
Step 4: Naming & Closing
Finally, give the policy a name. Attention: This is where confusion often arises:
- This is NOT the name of the label (that meant e.g. “Invoices”).
- This is the name of the “distribution job” that brings the labels to the users.
Best practice for naming: Get into the habit of a naming convention that describes the scope .
- Good:
Global-Label-Policy-Standard(Contains all standard labels for all users).- Good:
HR-Label-Policy-Confidential(Contains sensitive personal labels for HR only).Important: You don’t have to create a separate policy for each label! On the contrary, pack related labels (e.g. “Internal”, “Public”, “Strictly Confidential”) into a single policy to keep your overview clean.
Click Next, check your settings in the summary, and finally click Submit.
Patience and the “10 MB trap”
💡 After saving, Microsoft warns you: “It may take up to 7 days”. Many admins click this away and want to test it immediately. Here are the two toughest realities when testing labels:
1. The 7-day rule (waiting time) In practice, labels in Outlook Web (OWA) often appear after just a few hours. However, in the Outlook desktop client , it can actually take 24 to 48 hours.
- Tip: Always test on the web (OWA) first. If it’s there, your policy works technically. The rest is just sync waiting time of the local client.
2. The “10 MB hurdle” (The classic) This is the most common reason for support tickets at Microsoft.
- The problem: You create a fresh test user (
testuser@firma.de), give him the policy, log in – and nothing is there. No label far and wide. - The technical cause: The Exchange process that distributes labels (the Managed Folder Assistant) ignores mailboxes that are smaller than 10 MB to save server resources. So an empty test mailbox is simply skipped.
- The solution: Send the test user 2-3 e-mails with large attachments (PDFs, images) until the mailbox is about 10-15 MB full. Then wait 24 hours. Suddenly the labels appear.
Done!
You have now successfully created and published labels. Your users can now start classifying documents and emails in a targeted manner – and you’ve set the next big building block for your compliance strategy.
