Best practices for implementing sensitivity labels

Before diving deep into the Microsoft Purview admin center and starting to create and publish sensitivity labels, here are the most important best practices to get you started.

When you decide to start with sensitivity labels, consider the following aspects of your Microsoft 365 workspace governance:

• Privacy of the workspace,
• Sharing outside the group – internal sharing and collaboration,
• Sharing outside the company – how you work with external collaborators,
• Potential governance policies you wish to enforce now or in the future based on this classification, for example, Access Reviews.

Define a clear classification taxonomy

Establish a straightforward classification system that aligns with your organization’s data protection policies. Microsoft recommends no more than five top-level parent labels, each with up to five sub-labels, to keep the user interface manageable. Too many options cause confusion and poor adoption.

Use a limited number of labels

Use 3-5 per scope, so end users don’t get frustrated and confused with too many options.

Use clear and concise label names

Avoid vague classifications like “Confidential 1.” Instead, use “Confidential – Internal Employees Only.”

Prioritize labels appropriately

Arrange your sensitivity labels in order of priority, with the most restrictive labels (e.g., “Highly Confidential”) at the bottom of the list and the least restrictive (e.g., “Public”) at the top. This hierarchy ensures that more sensitive labels take precedence when multiple labels might apply.

Integrate with Data Loss Prevention (DLP) policies

Combine sensitivity labels with DLP policies to enforce rules that prevent data leakage, such as blocking the sharing of sensitive content with external parties.

Automate labeling where possible

Leverage auto-labeling capabilities to apply labels based on content patterns, keywords, or sensitive information types, reducing user friction and ensuring consistent application.

Apply encryption and permissions management

Configure labels to enforce encryption and define permissions, ensuring that only authorized users can access or modify sensitive content.

Educate your users

Provide training and resources to ensure users understand the importance of sensitivity labels and how to apply them correctly.

Monitor and review label usage

Regularly audit label application and effectiveness, adjusting policies as needed to address emerging risks or compliance requirements.

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