Saudi Arabia has emerged as a vital market for global consulting firms, particularly with the ongoing implementation of Vision 2030, which is designed to diversify the economy and reduce dependence on oil.

However, a recent decision by the Public Investment Fund (PIF) to suspend a major global consulting firm until February 2026 indicates a significant shift in Saudi Arabia’s approach to consulting services.

While the specific reasons for this decision remain undisclosed, it suggests a growing demand within the Kingdom for greater local impact, transparency, and sustainable value creation from consulting engagements.

The consulting landscape in Saudi Arabia has historically been dominated by international firms that often provide high-level strategic reports but have struggled with long-term knowledge transfer and capacity building.

Critics, including Prince Abdulaziz bin Salman, Saudi Arabia’s Minister of Energy, have highlighted the shortcomings of foreign consultants in fostering local expertise.

Despite the presence of approximately 6,000 consulting firms in the Kingdom, only about 5% are locally-owned, raising concerns about the effectiveness of foreign consultants as long-term partners rather than short-term solutions.

The PIF's recent decision underscores the urgency for consulting firms to invest in developing local talent and capabilities.

In addition to the localization gap, the consulting sector faces challenges related to hiring practices within Saudi Arabia.

Many local professionals have reported being overlooked for positions in favor of expatriates, with hiring decisions influenced by nationality rather than qualifications.

The Saudi government’s Saudization initiative has successfully integrated 64,000 Saudi nationals into the workforce; however, many high-skilled roles, particularly in consulting, remain predominantly occupied by expatriates.

As of March 2024, the government mandates that consulting firms achieve a 40% Saudization rate, although compliance and enforcement of these regulations vary, particularly in middle management positions where personal networks can affect hiring decisions.

In response to these concerns, Saudi Arabia has implemented a series of initiatives aimed at enhancing localization and oversight.

Training programs such as Tamheer have supported over 200,000 Saudis, while the Local Content Authority is pushing for greater development of local consulting firms.

Furthermore, the government is establishing stricter compliance standards, with financial penalties and potential bans imposed on firms that do not meet localization and governance requirements.

These measures indicate that consulting firms must align their business models with Saudi Arabia’s national objectives to maintain access to one of the world’s most lucrative consulting markets.

The PIF's decision reflects a broader transformation in the consulting industry, where clients are increasingly selective and demand measurable impacts rather than theoretical analyses.

Consulting firms are now required to demonstrate their value through key performance indicators (KPIs) and return on investment (RoI)-driven results.

This trend is accompanied by a rise in regulatory scrutiny, particularly in sectors such as government, finance, and energy.

Firms that do not adapt to these changing expectations may face reputational risks and significant revenue losses.

Smaller, specialized consultancies, particularly those focusing on sectors like aviation, fintech, and sustainability, are beginning to secure contracts that traditionally favored larger firms.

Their ability to offer customized, cost-effective solutions makes them more appealing to clients seeking concrete outcomes.

As a result, the traditional consulting model that emphasizes broad, high-level advice is under increasing pressure to evolve.

The future landscape for consulting firms in Saudi Arabia will be defined by those that embrace specialization, demonstrate clear impact, and strengthen governance structures.

Firms leveraging AI-driven analytics, automation, and digital tools are better positioned to enhance efficiency and deliver quantifiable results.

As the consulting sector navigates this period of significant transformation, it is evident that the emphasis on providing generic advice and superficial localization efforts will no longer suffice.

In the coming months, firms that align with the ambitions of Saudi Arabia’s Vision 2030 and actively invest in local talent and capabilities are likely to find new opportunities for success.