Research commissioned as part of Mental Health Week, which began yesterday, revealed a notable stigma around employing people with a mental illness, with half of the respondents believing they could be unreliable and disruptive.

At the last census, one in five Australians said they had been affected by a mental illness in the previous year.

The research results highlighted widespread negative perceptions of mental illness that did not match the reality, said Matthew Lambelle from not-for-profit employment services provider WISE, which commissioned the report.

''There is a distinct lack of understanding about mental health issues, which fuels stigma and causes some employers to shy away from hiring people with mental illness,'' he said.

The study conducted by McNair Ingenuity Research among 253 small and medium-sized businesses revealed that 74 per cent of organisations that had employed someone with a mental illness said it was a positive experience.

It also showed that 32 per cent of the businesses surveyed believed they would be likely to employ a person with a mental illness, compared with 46 per cent for someone with a physical disability.

And 35 per cent said they would be unlikely to employ someone with a mental illness - with ''unpredictable behaviour'' cited as the top reason why they would not be hired.