Whenever I play SGII I apply two fixes:
1) Cumulative morale: Morale really only starts to bight when a squad looses more than half of its number at any one time. I imagine that as the casualties stack up, the morale of a squad should become more fragile.
2) Close Assault odds: As I have argued (many moons ago) if a figure is outnumbered in combat it should suffer some penalty. Otherwise there is no game advantage to outnumbering an opponent in close assault. I apply a negative (open) die shift against any figure outnumbered in close assault.
Why should morale be circumulative? Watching Black Hawn Down again, the Americans spend a lot of effort to look after their wounded and dead.. Wound 1 model and the squad becomes immobile while the medic moves over and potentially another 2 models become non combattants as they carry the stretcher. I think the impact on casulaties should be almost uniform with serious
wounds more disabling on a squad than a dead result. I also think that once a squad takes 50% casulaties it is combat ineffective and can only take cover to try and protect their wounded.
Most wargames tend to make the soldiers far more courageous and tak far higher % casulaties than historical battles. Units often became ineffective at 10% casulaties.
Please note this is not a critism of the heroics of a war fighting nation. Certainly if I ever found myself in a fight like that, I'd want comrades that would look after me.
Why does being outnumbered in a close assault matter? Beyond those that can immediately reach to attack you ~6 models the rest can't reach to add to the fight. There perhaphs should be a bonus for surrounding a model so it is trapped and can't retreat / dodge. Also you have to be winning the fight. No number of rubbish troops are going to affect smaller numbers of better troops unless the rubbish troops can pull them down.