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Cutting software costs

Offboarding and Software Licenses: Stop Paying for Leavers

How to stop paying for software licenses after employees leave: connect HR, identity and SAM, reclaim licenses on day one, and protect data and security.

By the MI Solutions SAM team9 min read1 exhibit

When someone leaves, their laptop comes back and their email is disabled. Their software licenses often stay exactly where they were. Seats remain assigned to departed employees for months, sometimes until the next renewal locks them in for another year. It is one of the easiest forms of waste to prevent, and one of the most common.

It is also a security problem: an account that still has a license is often an account that still has access.

Where leaver licenses come from

Exhibit 1
A leaver's licenses can keep costing money long after the exitTypical timeline when offboarding stops at the identity providerPAID, UNUSED024681012Months after the employee leavesEmployee leavesHR records the exitdateSign-in disabledLicenses stillassignedSeats stillbilledCounted in everyinvoiceRenewalRenewed at the samevolumeAnother full termPaid for nobody

The gap is between disabling access and releasing the license. Many SaaS products bill for assigned seats whether or not the account can sign in, and many SAM teams only discover the leftover seats when preparing the next renewal.

1 in 10assigned licenses in a typical first review belong to people who have left or changed roleIllustrative; varies widely
Day 1is when access should be removed: on the last working dayGood practice
Same weekis when licenses should be released and reassignedGood practice

Why it happens

01HR and IT are not connected

IT learns about leavers late, or only for the main systems.

02Licenses are assigned by hand

Applications outside single sign-on are not touched by the identity process.

03Data has to be kept

Teams keep the license "just in case" because they are unsure what happens to the leaver's files.

04Nobody owns the leftover

Each application has an admin, but nobody checks across all of them.

Build a joiner-mover-leaver process for licenses

01Joiners

Assign licenses by persona, through groups in your identity provider, so new starters receive exactly what their role needs, and start from the reclaimed pool.

02Movers

When someone changes role, review their licenses. Remove what the old role needed and add what the new one needs. Movers often accumulate licenses over years.

03Leavers

On the last day, remove the user from license groups, release seats in each application, and transfer data ownership. Record the release in your SAM system.

An offboarding checklist for licenses

Leaver checklist

Check for leftovers every month

Even with a good process, some licenses slip through. Once a month, compare the list of licensed users in your largest products with your HR leavers list or disabled identity accounts. Anything that matches is a license to release.

How MI One helps

Frequently asked questions

Does disabling an account remove the license?

Usually not. Many products keep the seat assigned and billed until it is explicitly released.

How quickly should leaver licenses be released?

On the last working day for access, and within the same week for licenses.

What about contractors?

Treat them like employees: assign licenses with an end date, and review them when the contract ends.

Who should own the monthly sweep?

The SAM function, with application owners responsible for releasing seats in their products.

See where your software budget goes

Bring your five largest vendors to a 30-minute call. Our SAM experts will show you where the savings usually hide, and how fast MI One can surface them.