Retention label vs retention policy
Verdict: Use a retention policy for blanket, invisible, container-level coverage where every item gets the same treatment. Use a retention label when settings must vary per item, travel with the item, declare records, or require disposition review.
| Criterion | Retention policy | Retention label |
|---|---|---|
| Applies at | Container level (site or mailbox), all items inherit | Item level (folder, document, or email) |
| Visibility | Invisible to users, no user action needed | User-visible; user-applied or auto-applied, must be published first |
| Per-item variation | No; one setting for the whole location | Yes; different items can carry different periods |
| Moving an item | Settings do not travel; a copy stays in the secured location | Retention settings travel with the item within the tenant |
| Records and disposition | Cannot declare records; no disposition review | Can mark content as a record and require disposition review before deletion |
Rules
- Choose a retention policy when the same retention applies to a whole site or mailbox with no per-item variation and no user involvement.
- Choose a retention label when different documents in one location need different periods, since a policy cannot give one item five years and another ten.
- Choose a retention label when the treatment must follow the item as staff move it between SharePoint and OneDrive; policy settings do not travel with a moved item.
- Only a retention label can mark content as a record and support disposition review, letting a reviewer approve each item before permanent deletion.
- A retention label is unavailable to users until it is published through a retention label policy targeting the location; creating the label is a separate step.
- To preserve every prior version of an edited SharePoint file in the Preservation Hold library, versioning must be enabled on the library's site.
Traps
- A retention policy scoped to both SharePoint and OneDrive still does not make settings travel with a moved item - only a label does that.
- A retention policy can retain-and-delete at the container level but cannot declare records or run disposition review; both are label-only.
- A retention policy is more efficient than labelling every document when a whole site needs one uniform, invisible rule.