Most organizations have offboarding checklists: someone collects the laptop, disables the account, and revokes access to shared systems. The assumption is that OneDrive gets handled somewhere in that process, either automatically or by IT.
In practice, though, OneDrive often falls through the cracks. Accounts get deleted, but their OneDrives sit untouched for months or years. Shared links stay active. Storage keeps accumulating. Licenses remain assigned. Valuable files become inaccessible because no one transferred ownership before the retention period expired.
These gaps add up: hidden costs in storage, wasted licenses, security exposure, and lost productivity. If you want to close the gaps in your process, understanding what actually happens during offboarding is the first step.
When a user account is deleted in Microsoft 365, a fairly predictable sequence unfolds. The problem is that most of what happens involves waiting periods and manual intervention rather than automatic cleanup.
After deletion, the account moves to the “deleted users” container for 30 days. During this window, an administrator can restore the account and OneDrive access. After 30 days, the account is permanently removed from the directory.
The user loses access to their account immediately upon deletion. The OneDrive URL remains active, but login is blocked. However, any shared links set to “anyone with the link” continue to work.
This is a significant security issue. External collaborators who received sharing links before the employee left can still access those files indefinitely unless an administrator explicitly revokes the links.
By default, content is retained for 30 days after account deletion. This retention period is configurable in the SharePoint admin center and can be extended up to 10 years.
During the retention period, administrators can access the OneDrive, transfer ownership to another user, or download files. No automatic notifications are sent to managers when the retention period is about to expire.
Once the retention period expires, the OneDrive is permanently deleted. All content, sharing permissions, and version history are removed.
There is one critical exception: if the account has a litigation hold, retention policy, or eDiscovery hold active, the OneDrive moves into a Preservation Hold Library and is retained indefinitely. This can create a situation where OneDrives consume storage for years after an employee leaves, with no visibility into what’s being preserved or why.
Several critical steps that most organizations assume happen automatically actually require manual intervention:
Note: The Microsoft 365 Admin Center shows when accounts were deleted, but doesn't display OneDrive retention status or indicate whether the OneDrive still exists. There's no single list view that shows all OneDrives and their current state. You'll need to track the 30-day window manually, export multiple reports and cross-reference them, or use PowerShell to piece together a complete picture.
Manual offboarding isn’t just inefficient. It creates measurable costs across storage, licensing, and security.
Orphaned OneDrives still consume storage. While individual OneDrive quotas don’t draw from the SharePoint tenant pool that triggers overage costs, they still represent storage you’re paying for through user licenses.
If 100 departed users each have 50GB of orphaned OneDrive storage, that’s 5TB of data you’re maintaining without access, governance, or ownership. For organizations with high turnover or years of unmanaged offboarding, this can represent substantial waste.
Deleted user accounts often retain their assigned licenses until someone manually removes them. These licenses count against your subscription total and can't be reassigned to active users.
Even a small number of orphaned accounts represents thousands of dollars per year in wasted licensing costs. For example, if ten departed employees still have licenses assigned, that cost continues month after month until someone manually removes them. At scale, this adds up quickly.
Shared links remain active unless explicitly revoked. External shares persist indefinitely. If an employee shared sensitive files with external collaborators before leaving, those links continue to work until an administrator discovers and removes them.
For organizations with retention policies or litigation holds, orphaned OneDrives create additional complexity. Content may be preserved in the Preservation Hold Library with zero visibility into what’s being retained, where it came from, or whether it still needs to be kept.
You can’t apply appropriate retention or deletion policies to content you don’t know exists.
The typical manual offboarding flow involves multiple people and handoffs:
HR notifies IT that someone is leaving. IT disables the account and may notify the manager. The manager sometimes reviews the OneDrive and requests access to specific files. IT grants access and may remove licenses, but rarely has time to check for shared links or proactively manage the retention period.
In many cases, the OneDrive simply expires after the retention period without any review.
There are several drawbacks to manual offboarding:
The result is that most organizations have dozens or hundreds of orphaned OneDrives and a manual process that can never catch up.
Different types of departures require different approaches. Here are a few of the most common scenarios and how organizations typically handle them.
When a senior employee or subject matter expert leaves, their OneDrive often contains unique documentation, project history, or reference materials that can’t be easily recreated.
Best practice: Set a longer retention period (90 days or more) or proactively add the user's manager as a co-owner before the employee departs. Give the manager time to review and determine which files should move to a departmental SharePoint site for long-term access. This reinforces the principle that shared business assets belong in shared workspaces, not personal storage.
Contractors and interns typically work on defined projects with clear start and end dates. Their OneDrives are usually smaller and contain less business-critical content.
Best practice: Use a shorter retention period (30 days) with deletion if no action is taken by the manager. This reduces the manual review burden while still providing a window for managers to claim any necessary files. IT teams can be proactive here by adding the user's manager as a co-owner before the contractor's end date, giving the manager immediate access without requiring a post-departure ticket.
When an account has a litigation hold, retention policy, or eDiscovery hold, the OneDrive cannot be permanently deleted until the hold is released. This can create a situation where content is preserved for years.
Best practice: Archive the OneDrive to a compliance-specific site with restricted access. Document why the hold exists and when it can be reviewed. This keeps the content discoverable while preventing it from becoming organizational clutter.
When an employee is terminated or leaves without notice, there’s no opportunity for a structured handoff. Managers need immediate access to work-in-progress files and client communications.
Best practice: Transfer ownership to the manager immediately after account deletion, then follow the normal retention and archival process. This ensures continuity while still maintaining proper lifecycle management
You can also consider blocking the user's sign-in rather than immediately deleting the account. This prevents the retention period from starting while still revoking access, giving IT and managers more time to assess content and transfer ownership. Once the handoff is complete, delete the account to begin the formal retention period.
Manual offboarding creates backlogs and gaps. A policy-driven approach means defining clear rules about what should happen when someone leaves, then automating as much of the execution as possible.
Effective offboarding workflows look like this:
Before building a new workflow, understand the scope of the problem.
Review users who left in the past 12 months and determine:
You can see recently deleted accounts in the Microsoft 365 Admin Center under Users → Deleted users, but this only shows accounts within the 30-day recovery window.
For OneDrives that have persisted beyond that window or are consuming storage under deleted accounts, there isn't a straightforward admin center view.
Most organizations need to either export OneDrive usage reports and cross-reference with HR records, or use PowerShell to identify these orphaned drives. This visibility gap is part of why orphaned OneDrives accumulate in the first place.
In the SharePoint Admin Center, go to Settings, then find the OneDrive retention section. The default is 30 days, but many organizations extend this to 90 days or longer.
Document why you chose your retention period. Is it driven by a compliance requirement, business need for knowledge transfer, or simply giving managers enough time to review and claim files?
A clear policy answers these questions:
The goal is a written policy that can be applied consistently without requiring judgment calls for every departure.
With a clear policy defined, the next step is implementation.
If you’re doing this manually, build a checklist and assign clear ownership. Realistically, manual processes struggle to keep up once you’re offboarding more than a couple of people per month.
Effective automated offboarding requires several capabilities working together:
Organizations typically achieve this through a combination of Microsoft 365 native capabilities (like Power Automate for detection), identity management systems (for account status monitoring), and governance tools that provide visibility into orphaned OneDrives and structured review processes.
The key is moving from reactive ticket-based processes to systematic workflows that reduce the burden on IT while ensuring nothing falls through the cracks.
Offboarding workflows aren’t set-and-forget. Review your orphaned OneDrive dashboard monthly to measure progress.
Monitor three key metrics: storage reclaimed from completed offboarding, licenses recovered and reassigned, and time saved compared to manual processes.
Use this data to refine your policy. If managers consistently request more time to review files, extend the notification window. If certain departments rarely claim files, consider a shorter retention period for those groups.
OneDrive offboarding isn’t just an HR problem. It’s a data lifecycle problem that directly impacts storage costs, security risk, and operational efficiency.
Organizations that treat OneDrive offboarding as a manual, reactive process end up with orphaned accounts, wasted licensing, and security gaps. Those that build policy-driven workflows reduce costs while improving the experience for managers, IT, and departing employees.
Start by running the audit described above. Understand how many orphaned OneDrives you have, how much they cost, and where the gaps in your current process exist. Then build a workflow that closes those gaps systematically rather than hoping manual processes will keep up.
In our next post, we’ll look at why “just delete it all” isn’t a storage strategy and what a more sustainable approach actually looks like.
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