basic empire troops should be able to be turned into retinues when they get to a certain troop tier

Hello!

1. You need to be Witch Hunter career tier 2 (level 2 clan) and have the required skill in "The Silver Hammer"

2. You then should recruit empire troops and, when selecting them in your party menu, there should be a hammer button just before the upgrades buttons. When you click on it, it will open the transaction interface where you can slide the converted troops from left to your army (right). If you move 2, you get two. Don't worry, those left on the left (pun intended) won't be converted nor lost.

Note that you can't convert Nobles, and you can use empire recruits (the basic recruitable units) as a base to convert them into basic retinue troops that you can level up. Surely converting higher tier troops should provide you with already upgraded retinues, but I haven't tested it (too afraid to lose good troops).

Note that it takes 3 prestige to convert a regular recruit to a basic retinue, then 15 to upgrade it mid-tier and 30 for high tier (again, I dunno about converting higher end troops).
Oh, and I found making the low tier retinue troops level up was a pain...

Hope this helps!