The promotions system in part 2 of The Banner Saga works in a very similar fashion to how promotions worked in part 1. Most of the system should be familiar to returning players, but there are a few small tweaks in costs, the rank cap and the new talent system

Heroes can spend renown to rank up. Renown is primarily earned through defeating foes in combat or through choices made in story events that occur as the caravan progresses. Each time a hero ranks up they get 2 points to spend on their stats (Armor/Strength/Willpower/Exertion/Break), up to a predetermined maximum that varies by hero. Points are always spent on a 1 for 1 basis, so upgrading strength costs the same as upgrading break.

In addition to gaining points heroes upgrade their active abilities at ranks 3/5/6/8/10 and upgrade their item rank with each rank up (each equippable item in the game can only be equipped by heroes who have reached the same rank as that item).

(In this image Bolverk has 4 points to spend, he can increase either his willpower up to its maximum of 10 by clicking the plus sign on the yellow line up to twice or his exertion up to its maximum of 3 by clicking the plus sign on the green line. Decisions are not locked in until "confirm" is clicked afterwards)

Once a stat is at maximum new options are opened up. By clicking on the icon, marked with a "+" sign a new dialogue opens, which allows you to choose between two talents associated with that stat. Only one of these two talents may be chosen for a hero, and once locked in cannot be swapped out, so choose wisely! You can select between the talents by clicking the left and right arrows above the talent name.

(Clicking the + below the word "Robust" will add talent ranks to the Robust talent. Clicking the ">" arrow to the right of the word "Robust" will allow the player to view the alternative strength talent "Artery Strike". After talents are added the "confirm" button must be pressed to lock them in).

Each talent has up to 6 ranks in banner saga 2, with only ranks 1-3 being obtainable for points. Higher ranks can only be achieved by investing at least one point in a talent, then equipping an item with the "increases talent rank" property associated with that talent. For example the rank 10 item "Clasp of Kyn" increases all unlocked talents by 3 ranks, making it an excellent choice for a hero who has 3, 4 or even 5 talents unlocked at rank 1.

One additional change from the system in BS1 is that the kill requirement for promotion can be obtained in battles in the training tent at camp.

Armor Talents

• Hunker Down
  20% chance to resist 1/2/3/4/5/6 armor damage.
  
• Tighten Straps
  20%/25%/30%/35%/40%/45% chance to regenerate +1 armor per turn.

Strength Talents

• Robust
  20% chance to resist 1/2/3/4/5/6 strength damage.
  
• Artery Strike
  10%/15%/20%/25%/30%/35% bonus crit chance (nb. crits double strength damage after armor reduction).

Willpower Talents

• Defy
  30%/40%/50%/60%/70%/80% chance to avoid a killing blow.
  
• Stubborn
  20% chance to regenerate 1/2/3/4/5/6 willpower per turn.

Exertion Talents

• Dodge
  5%/10%/15%/20%/25%/30% chance to avoid strength attack.
  
• Lucky Shot
  30%/40%/50%/60%/70%/80% bonus hit chance.

Break Talents

• Exploit
  10%/15%/20%/25%/30%/35% chance to cause puncture (nb. puncture is the same ability archers have when they do not move on their turn. It adds 1 bonus strength damage for every 2 points of armor the target has lost).
  
• Divert
  5%/10%/15%/20%/25%/30% chance to avoid armor attack.

Notes

• Talents do not scale evenly. Tighten straps r5 is only twice as effective as Tighten straps r1, for example. Whereas Divert or Dodge is 5 times as powerful (arguably more) at r5 as at r1. Tighten straps is also very much weaker than the same bonus obtained on an item, such as Calabilla or Björg av Leander. It can still be worth taking on a mender character who otherwise cannot get armor back though.
  
• Lucky Shot is a rather weak talent, it reduces your chance to get "deflections", which occur almost exclusively when you attack enemies with higher remaining armor than your strength and is a 10% hit penalty per point of difference. Lucky Shot does not benefit axe throw.
  
• Ranks 4-6 of the talents are not displayed in game unless an item with the appropriate talent bonus is equipped. Because many of these items increase all talents by a set amount of 1/2/3 ranks it is often better for a hero to take as many talents at rank 1 as possible before investing in higher talent ranks, as the increase only applies to talents at rank 1 or above.

These are the promotion requirements in Banner Saga 2:
(Kills are cumulative, renown is per level. Thus 30 kills and 101 renown will take a level 3 hero all the way to level 10)

And these were the requirements in Banner Saga1:

As can be seen it is much cheaper to promote heroes in BS2 after importing a saved game file from a completed BS1 playthrough than it is to promote heroes prior to importing. In particular since the minimum level for BS2 heroes is 3 any heroes of rank 1-2 get one or two promotions for free instantly.

At level 6 heroes get a choice of one additional active ability chosen from a range of between one and four alternatives (depending on class), many of which are very powerful, making this a benchmark to aim at for many heroes who you plan to use a lot.