The top right corner of your Mercenary’s avatar will show a number that is their current stage of Promotion.
Promote your Mercenary so they can reach their full potential. This process will make your chosen Mercenary stronger, but requires you to choose a Mercenary to retire first. They must be the same Designation and Grade as the Mercenary you wish to Promote. There are 5 stages of Promotion, and each one boosts all the Skills of your Mercenary. A Class 5 or 6 Mercenary can only reach their highest Level when fully Promoted. Retired Mercenaries will disappear.