So, some ideas...
A unit when damaged has it's max and it's current HP reduced. Max HP goes down about half as fast as current HP.
A unit can be healed up to max HP in the standard way, but recovering max HP requires stripping max HP off another unit of the same type.
This means taking wounds on your unit requires industrial replacements, and you cannot just "heal up". You have to replace the dead citizens.
...
When you build "manpower heavy" units, have it strip food at a rate of 1 food per X production put into the unit. If you run out of food, your city shrinks a size and you refill the food pool to full.
This represents the men you are sending off to fight and die. Empires with lots of farm land and high initial population can produce lots of manpower. Empires with less can run out.
(Grainery like mechanics will be exploitable (grow, get half a bank of food, shrink eating food, then grow again), so don't include them.)
...
Something has to be done to represent the stupidity and slaughter of early combat. Unless there is a reason, player's won't suicide troops into enemy fortifications that are too strong to take.
Maybe units in trenches adjacent to each other fight each other automatically until you get better doctrines? Or maybe machine guns can "bombard" infantry until the infantry develop better doctrines?
There is the problem of "destroy your trenches, then fall back". If the opposition advances into the hole, they are without trenches themselves, and can be counter-attacked and killed easily. This doesn't match WWI tactics...
I guess the base trench can be "assumed", with the trench improvement reserved for more extensive trenchwork?
Ie:
Infantry: +50% defense vs infantry units (represents crude trenches)
Can do up to 5% collateral damage at 25% strength
Machine Gun: Grants +100% defense vs Infantry to Infantry in the same square. +100% attack vs Infantry.
Lower strength than Infantry.
Can do at most 30% damage attacking before withdraw and 10% collateral damage at 50% strength
Targets Infantry when attacking
(MG "attack" represents baiting the enemy to attack into your MG defenses)
Artillery: Can do at most 40% damage attacking before withdraw, and 40% collateral damage. Defends against other Artillery.
When a unit that "defends against X" is present, max damage rules are ignored -- the fight is to the death, unless one side or the other withdraws. Units that die when fighting "defends against X" units do not deal any collateral damage.
Tanks: Can do up to 15% collateral damage at 50% strength
Now your front lines will have MGs chewing up the opposing forces, representing the slaughter of early trench warfare. Techs will make infantry stronger and stronger against MG attack, representing "we attack enemy trenches right at MGs less, because we aren't idiots anymore".
What do you think?