Best Practices for Managing Employee Offboarding with Office 365

In today’s hybrid work culture, businesses mostly depend on Microsoft 365 to keep their teams connected and productive. While hiring and onboarding often get the most attention, offboarding especially within Office 365 is just as important. As per Forbes report, if not handled properly, companies incur risk including data leaks, unlicensed entries, and regulatory issues.

Hence, it’s important to maintain security and facilitate non-disruptive transitions when an employee leaves whether voluntarily or involuntarily by following the Microsoft Office 365 Offboarding Best Practices.

This guide explores on how to offboard employees securely in Office 365, automate workflows and improve the offboarding experience.

Why Effective Offboarding in Microsoft 365 Is Critical

When an employee departs from your company, their access to sensitive emails, files, calendars, and applications doesn’t automatically go away. If this is not managed appropriately, ex-employees could retain access to business-important data long after they’ve left.

  • Unauthorized access to business applications and data
  • Data loss or deletion
  • License wastage
  • Compliance violations

By implementing a standardized process not only helps protect your digital ecosystem, but it also helps to alleviate the burden on your resources and administrative functionality.

Step-by-Step Guide to Employee Offboarding in Microsoft 365

To help you execute a repeatable and safe process, here’s a step-by-step Office 365 employee offboarding guide that your IT team can follow:

1. Log Out Employees from All Active Sessions

To protect your organization’s data, the initial step is to log the going employee out of all active sessions within Microsoft 365. This reduces unwanted access problems during the transition time.

  • Navigate to the Microsoft 365 Admin Center.
  • Go to Users > Active Users.
  • Select the leaving employee’s account and click on Sign out of all sessions.

This guarantees they can no longer access corporate resources across multiple devices.

2. Block Account Sign-In and Reset Passwords

The next step is to prevent further access by blocking the user’s sign-in account and reset passwords.

  • In the Admin Center, select the user’s profile.
  • Click Block sign-in and verify the activity.
  • Also, consider changing their password without sharing it across.

By doing so, ensures immediate security until you complete other steps.

3. Preserve Critical Data

Safeguarding data is one of the most important components of leaving a business. You can use several Microsoft 365 tools to safely hold and transfer the information:

  • Convert Mailbox to Shared Mailbox: This allows your team to view emails, with no additional license required.
  • Export Mailbox Data: Use eDiscovery tools that helps you to archive emails for compliance reasons.
  • Transfer OneDrive Files: Moving ownership of OneDrive files to another employee, or to a shared drive can be done using your admin inbox.

These steps will guarantee that you do not lose any of your important company information during the move.

4. Set Up Email Forwarding

To maintain communication continuity, set up email forwarding for the leaving employee’s mailbox:

  • Navigate to Admin Center > Users > Active Users.
  • Find the user and enable Email Forwarding, entering the recipient address.

This is especially useful if the employee was engaged in customer-facing roles where communication is essential.

5. Remove Mobile Device Access

If the employee was given devices to conduct business for the company, ensure these are wiped clean and revoked permission from using Microsoft 365 resources:

  • Use Microsoft Intune for mobile device management.
  • From a web browser, navigate to the Exchange Admin Center and wipe data from registered devices.

These actions will limit the ability to access company resources through a mobile application.

6. Remove Licenses and Group Memberships

Reclaim unused licenses when removing the departing user:

  • In the Admin Center, go to the user’s profile.
  • In the Licenses and Apps settings, uncheck the assigned licenses and save the changes.

Additionally, remove the user from any distribution groups, or shared resources, to maintain a successful license management and an organized environment.

7. Automate Offboarding for Office 365 with PowerShell

Offboarding a user manually is always a time-consuming process and can be errors prone. By computerizing works using PowerShell scripts, companies can provide an efficient process:

  • Run scripts like M365UserOffBoarding.ps1 which does several tasks like logging out users, transferring data, and removing licenses in one go.
  • Depending on your organizations’ requirements, customize scripts for quick execution.

Automating tasks will reduce the amount of time spent performing these important operations, while also reducing human mistakes.

How to Offboard Employees Securely in Office 365

Security should be at the forefront of any offboarding strategy. Here are some additional tips which you can put into practice for Microsoft 365 environments:

1. Enable Legal Holds for High-Risk Departures

Conduct a legal process on the user’s mailbox and OneDrive if there is a compliance, legal, or HR liability when the employee leaves. This protects the content and makes it legally defensible for internal or external purposes.

2. Set Retention Policies

By using an appropriate SaaS management tool, assign policies to ensure content is retained, even if the account and license are deactivated. These guidelines support both future data recovery needs and regulatory standards.

3. Audit Logs for Activity Monitoring

Before offboarding is complete, examine audit logs to see what the user has been doing recently across Microsoft 365 services. Doing so helps in spotting any odd conduct, data movement, or possible policy violations.

4. Check Access to Third-Party SaaS Applications

Verify that the employee does not have active integrations or external tools using their Microsoft 365 account credentials. By revoking access from these third-party tools eliminates potential data breaches and threats once the offboarding is done.

5. Document Offboarding Actions

Maintain thorough documentation of all Microsoft 365 offboarding procedures, including data transfer and licence revocation. These records provide internal accountability and preparedness for external resource tracking.

A Smarter Approach to Office 365 Employee Offboarding!

Are you planning to simplify and safeguard the process of offboarding employees in Microsoft 365? CloudFuze’s SaaS Management Platform provides a complete, automated solution for user deprovisioning, data expiration, and permissions management. Our professionals can provide a customized offering to meet your company’s specific needs and compliance requirements.

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