More specifically company sized units are not recruiting properly. It was working at first then stopped later, not sure what the trigger was unfortunately.

http://www.screencast.com/users/Slainangel52/folders/Jing/media/83d5890a-e1eb-475f-aa43-27672586d0a0

Edit:

I just remembered something odd that kind of marks when it started. I built a squad of units (6). When that group took losses in a battle (3) any new squads I built were limited to size 3. I think that the loss of an entire company or squad is what disabled the ability to recruit those sizes.