Employee Directory / Users with Role Type Participant / Divisions / Admins

Hi all,
I have some questions and problems with combining EX with normal user management in Qualtrics.
When employees are added into the Employee Directory, automatically a User is created for them with the User Type "Particpant".
As we would have an integration with our employee database, everyone within our company would be created as such a Participant user in Qualtrics.
These Participant users get an empty Division assigned.
On the other hand we have our CX projects. Some people within our company get an actual user with permissions to create surveys and dashboards. So whenever one of our employees needs to get an actual user, we would then change that person's User Type from "Participant" to another user type like "Standard - Qualtrics".
However, the ONLY person who could do the above, is the Brand Administrator.
And this is where the problem starts.
Because we have EX active, brand administrator permissions are disputed. Brand Admins can Proxy login as any user, also as HR users, and could that way look up responses to sensitive EX surveys such as Exit surveys.
So non-HR employees should therefore not be brand administrators.
But we do need non-HR employees who could manage the creation of new Users, as mentioned before for the CX programs.
So then you might think, "oh, just create an HR Division, and a non-HR division. And make a CX-employee the Division Admin of the non-HR division, Division Admins can also create users within their own division"
Well, no, doesn't work unfortunately. Because all our employees already exist as a Participant on an empty Division.
When the Division Admin tries to create a user, there is an error message "username is not available". Because the user already exists. But the Division Admin cannot see him because the user is on an empty division...

Anyone who has some good advice on this situation, or has solved this within their company?
Any help is much appreciated!
Thanks,
Joyca