There's a character who shows up in Oleg's called Noriel Eight-Eyes. Eventually in the dialogue it says he'll join your party for 2000 gold. I did some grinding to get the gold, and went to recruit him, but when I did, it opened up the character generation screen to build a new character from scratch.

Is this what it's supposed to do?

Yes, you can hire custom adventurers from her.

I read more carefully and figured it out. Decided to add a rogue then found one about 15 minutes later. Doh.