Repeat the process with your Watchmen and upgrade them to Mercenary Guards, this is what we want. So don’t upgrade any until all are ready.
Because of how troop XP, the entire unit class shares an XP pool. As a tip, try to upgrade all your troops at once. Your peasants will level up to Watchmen quite fast, Watchmen have no ranged attack, so they’re slightly more dangerous to level up against looters, so expect more fatalities.