Being able to retain experience for early game units while upgrading them to larger unit formations would be swell.
The way I'd like to see it be done; if you wanted to upgrade a party, you'd have to be in a town (maybe with a training yard, and a blacksmith if metal equipment is required) and it would cost the difference in materials, metal, time, ect. to be able to upgrade. Plus, the experience previously gained by the squad would be split evenly amongst the new squad size.
Say, for example, you have a Redwatch party of 3 units and you wanted to upgrade them to a group of 5 units. To produce them, it costs 80 labor and 2 metal per a unit. You are adding two members to the group, so it would require 160 more lablour and 4 more metal. Once ordered, the unit would become inactive until the work order placed on the town's build queue has been completed. The party of 3 members had 150 experience, so that would be cut 3/5ths so that the new 5 member group now has 90 experience, most likely losing level(s).
I'd also like to see that kind of system for upgrading the weapons and armour of units, instead of the goofy gold amounts required to do so, presently.