What are these "ranks" and "tiers"?

The rank of a mercenary determines the level of spells and abilities they have available to them, and there are five tiers within each rank. There are currently two ranks of mercenaries - Apprentice and Journeyman. (The actual spells and abilities they have also depends on the mercenary's level which is the same as yours.)

Journeyman healers will have more powerful buffs and heals than Apprentice healers. A journeyman healer has a 96% resurrect vs. an Apprentice healer's 90%.

Journeyman melee mercenaries have better offense and defense than Apprentice healers as well.

The higher the tier the more effective a mercenary is at doing their job, and the less likely they are to get scared and run away.