Whilst I'm not doing a Level 3 qualification at the moment (having done the equivalent Certificate in Personnel Practice around 20 years ago!), I did have the same choice for my Level 5 qualification that I am now coming towards the end of.
For me it would be about the time you have to spend studying, how much of HR you want to cover and the cost (if paid by your employer or personally funded). I decided on the Certificate as after having done a degree and Levels 4 and 5 CIPD, I didn't think I could cope with more than around 12 months studying! Also as mixed mode work based learning I could choose the optional modules that were most relevant to my role.

In reply to Clare:

Thanks Claire, I suppose what is most important to me at the moment is whether the diploma would be more appealing to a potential employer, I think to cover all bases I'm more inclined to go for the diploma!

In reply to Rebeccah:

I see. Now that I coming to the end of my Certificate, I would also be interested to know how employers may view it, whether it makes any difference at all. For me it was a decision about what it involved rather than how it would be recognised, but a good point to ask.

In reply to Clare:

I'd like to know the answer to this as well! Sorry #jumpingonthebandwagon!

I completed the L5 certificate and then decided to do the top up to the diploma which was only an additional 2 units. For me I was looking at potential jobs and though the diploma qualification may put me at an advantage, and also potentially be more of a lead into completing the Level 7 one day.

In reply to Jenny:

As my qualification was employer funded and working in the Public Sector, the slightly cheaper option worked for me. As I did mixed mode style I think I would have struggled with the additional modules (or at least finding an optional 1) that wouldn't have been too big a learning curve. I learnt a lot through all the modules and they were at the right level to stretch me, but it wasn't as much of a challenge if something where I had at least some familiarity and knowledge of it already - e.g Employment Law.
If I had the opportunity to do level 7 this would have to be done through a taught course as it just wasn't possible in mixed mode/workplace setting due to the level I am currently working at (even with all the support, opportunities, mentoring etc). And I feel I have worked through a lot of levels already - 3,4 and 5 and have 15 years HR experience (although not at managerial level).