In military language means recruits not yet fitted to take their place in the regimental line.
A squad is a troop or company of soldiers under a sergeant. It is a contraction of squadron. A squadron of cavalry is the unit of a regiment. Three or four squadrons make a regiment, and a certain number of regiments constitute an army. In naval affairs a squadron is a section of a fleet.
Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894