This is a good idea. But it carries the risk of a death spiral – you go through a rough patch, lose experienced men and, on top of it, can’t even recruit any decent noobs, so you go underpowered into the next assignment and lose another guy…
But I agree that your reputation should involve this aspect as well. Potential recruits would certainly take this into account and request either more money or refuse to join at all. (You could go really deep and crazy and have recruits demand certain levels of armor or that they always carry a shield etc.)
