Pile driving operations disturb the surrounding soil, altering its mechanical properties. The zone of disturbance can extend up to several times the pile diameter. This disturbance results in changes in effective stress and a subsequent increase in pore pressure within the disturbed zones. Over time, pore water pressure dissipates, and effective stress improves, leading to an increase in the load-carrying capacity of the pile. The consolidation phenomenon plays a crucial role in the evolution of pile capacity. To analyze this process, the Crank–Nicholson finite difference method is employed to solve the pore pressure differential equation. Expressions are developed to estimate the time-dependent load-carrying capacity of the pile foundation. The installation of the pile is simulated using the cavity expansion method, and the Modified Cam Clay (MCC) model is utilized to capture soil behavior immediately after pile installation. The results from the present analysis are compared with past experimental data and show consistency with the experiments. A parametric study is also done to assess the effect of various parameters of soil, such as soil stress history and stiffness on the evolution of pile capacity. It has been observed that the absolute value of excess pore water pressure generated is substantial for the higher value of the soil stiffness and the overconsolidation ratio. One month after pile installation, the pile’s capacity achieved an almost 200% increase compared to its initial capacity. The proposed analytical formulation can assist in determining the suitable duration before the pile can be safely used for working.